The Process of Marking a Futures Contract to Market Means

question 52

Multiple Choice

The process of marking a futures contract to market means that:

• A) the profitability of the contract is locked in from the onset of the contract.
• B) the amount of commodity to be delivered changes as prices change.
• C) contracts are closed out as soon as they become unprofitable.
• D) profits or losses are settled daily.

---

Definitions:

Prediction Interval

A range of values that is likely to include the value of a new observation, given what has already been observed.

Cost of Paper

The expense associated with acquiring paper, which may include its purchase price as well as any additional costs related to procurement or delivery.

Average Selling Price

The average price at which a particular product or range of products is sold over a specific period.

Standardize Residuals

The process of converting residuals from a regression analysis into a standard scale to identify outliers or make comparisons.