Which of the Following Statements Is True

question 14

Multiple Choice

Which of the following statements is true?

• A)In a futures contract, daily cash flows pass, via the clearing house, between the buyer and seller in response to the mark-to-market process.
• B)In a forward contract, daily cash flows pass, via the clearing house, between the buyer and seller in response to the mark-to-market process.
• C)In a futures contract, daily cash flows pass, via the clearing house, between the buyer and seller in response to the mark-to-book value process.
• D)In a forward contract, daily cash flows pass, via the clearing house, between the buyer and seller in response to the mark-to-book value process.

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Definitions:

Petty Cash

A small amount of cash on hand used for covering minor and incidental expenses in an organization.

Payment

The act of transferring money or its equivalent in exchange for goods or services.

Postage Stamps

Adhesive paper evidence of prepayment for postal services, used to send letters and packages.

Cash Equivalent

Short-term, highly liquid investment assets that are readily convertible to known amounts of cash and are subject to insignificant risk of changes in value.