Parties to a Futures Contract Must Satisfy Margin Requirements (Initial

question 35

True/False

Parties to a futures contract must satisfy margin requirements (initial, maintenance, and variation), and futures contracts are marked to market at the beginning of each trading day.

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Definitions:

Total Runout

The maximum allowable variation in the shape and location of a feature when measured around the entire surface.

Tolerance

The permissible limit or variation in dimensions, typically expressed in plus or minus values, indicating how much deviation from a standard is acceptable.

Circular Runout

A term in mechanical engineering that describes the tolerance of how much one circular element of a part can deviate from a perfect circle as it rotates.

Cross Section

A diagram or representation showing the internal structure of something when cut along an imaginary line.