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Discuss What It Means for a Futures Contract to Be

question 46

Essay

Discuss what it means for a futures contract to be marked to market.If you provide an example,assume that the hedger has purchased a 5,000 bushel wheat contract at a price of $3.90 per bushel.


Definitions:

Qualitative Analysis

The examination of non-quantitative aspects of a company or its market, such as management quality or sector conditions.

Market Rate of Interest

The prevailing rate of interest observed in the marketplace for securities of similar risk and maturity profiles.

Bond Selling For

Bond Selling For indicates the current market price at which a bond is being traded, which can be at a discount, at par, or at a premium relative to its face value.

Coupon

A payment to the holder of a bond made periodically until the bond matures, typically representing interest on the bond.

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