Which of the Below Does NOT Involve a Function of the Clearinghouse

question 4

Multiple Choice

Which of the below does NOT involve a function of the clearinghouse?

• A) One functions is to guarantee that the two parties to the transaction will perform.
• B) When someone takes a position in the futures market, the clearinghouse takes the same position and agrees to satisfy the terms set forth in the contract.
• C) The clearinghouse makes it simple for parties to a futures contract to unwind their positions prior to the settlement date.
• D) The clearinghouse interposes itself as the buyer for every sale and the seller for every purchase.

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Definitions:

Depreciable Plant Assets

Long-term tangible assets used in the production of income that lose value over time and thus are subjected to depreciation accounting.

Balance Sheet

The Balance Sheet is a financial statement that shows a company's assets, liabilities, and shareholders' equity at a specific point in time.

Marketable Securities

Financial instruments and assets that can easily be converted into cash without significant loss of value.

Investments

Investments refer to assets purchased with the intention of generating income or appreciation, including securities like stocks and bonds, real estate, or other vehicles.