The Typical Sequence of Cash Flows in a Futures Contract

question 49

Multiple Choice

The typical sequence of cash flows in a futures contract is:

• A) purchase price plus a margin account up-front, differences are settled at expiration.
• B) margin account up-front, differences are posted daily and settled in cash if margin drops too low.
• C) margin account up-front, all differences settled at expiration.
• D) all funds are paid at expiration of the contract.