Which of the Following Statements Best Describes Marking to Market

question 42

Multiple Choice

Which of the following statements best describes marking to market?

• A)The process of setting up a contract with a clearinghouse to operate as a counterparty between the buyer and seller of a futures contract.
• B)The process of personalizing futures contracts.
• C)The requirement of a futures exchange for daily cash settlement of all contracts.
• D)The final day on which trading occurs in a particular contract.

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Definitions:

Future Cash Flows

Projected cash earnings and outflows that a company expects to receive or pay out in the future.

Book Value

Book value is the net value of a company's assets minus its liabilities, often used to assess whether a company's stock is over or undervalued by the market.

Fixed Asset Turnover Ratio

This ratio measures how effectively a company uses its fixed assets to generate sales, calculated as net sales divided by average fixed assets.

Net Operating Income

A calculation used to analyze the profitability of income-generating real estate investments, which subtracts all operating expenses from all revenue generated from properties.