Novation in Futures Exchange Means

question 35

Multiple Choice

Novation in futures exchange means:

• A)a place in which buyers and sellers can exchange futures contracts.the exchange keeps the books for buyers and sellers when contracts are initiated or liquidated.
• B)the process of setting up a contract with a new party,such as occurs when clearinghouses insert themselves between the buyer and seller of a futures contract.
• C)a requirement that gains or losses on futures positions be taken into account in determining the value of all contracts each day.
• D)the back office that records,clears and settles contracts and acts as counterparty in futures trading.

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Definitions:

Statement of Cash Flows

A report detailing the impact of variations in balance sheet positions and income on cash and cash equivalents, segmented into operating, investing, and financing activities.

Increase in Accounts Receivable

A rise in the amount of money owed to the business by its customers for goods or services delivered.

Operating Activities

Transactions and events that enter into the determination of net income, including the production, sale, and delivery of a company's products and services.

Statement of Cash Flows

A financial report that provides aggregate data regarding all cash inflows and outflows a company receives.