Marking to Market Involves

question 2

Multiple Choice

Marking to market involves

• A) changing the futures price to the spot price each day.
• B) engaging in arbitrage so as to reduce the risk involved with futures contracts.
• C) crediting or debiting the margin account based on the net change in the value of the futures contract.
• D) updating the futures price after the market closes each day.

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Definitions:

Price Changes

Variations in the cost of goods and services over time, affecting consumer behavior and economic trends.

Hyperinflation

An extremely high and typically accelerating inflation rate, often resulting in the quick erosion of the real value of the local currency.

Inflation

The tempo at which prices for general goods and services ascend, leading to a depreciation in money's buying strength.

Government

The organization or system through which a society or community is ruled, often responsible for creating and enforcing laws, policies, and regulations.