With Futures Contracts,a Trader's Position Is "Marked to Market" Daily

question 10

Multiple Choice

With futures contracts,a trader's position is "marked to market" daily.This means that an investor who bought a Treasury bill futures contract will end up with what change in account value if interest rates drop on a given day?

• A)none-the difference in value simply accrues until the contract is sold
• B)the trader's account will increase in value
• C)the trader's account will decrease in value
• D)it can not be determined with only this information

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Definitions:

LIFO Inventory

An inventory valuation method where the last items added to inventory are the first ones to be used or sold.

Merchandise Inventory

Goods that a company holds for the purpose of selling them to customers, often a significant asset on the balance sheet for retailers.

Lower Of Cost

A principle in accounting that dictates inventory or other assets should be reported at the lower amount between its historical cost and its market value.