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.

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Definitions:

Depression

A common and serious mood disorder that affects how you feel, think, and handle daily activities, characterized by persistent feelings of sadness and/or loss of interest.

Subsequent Episodes

Later occurrences or episodes of a condition or illness that happen after the initial episode.

Prevalence

The proportion of a population found to have a particular condition at a specific time.

Mania

A state of abnormally elevated arousal, mood, or energy levels, often associated with bipolar disorder.