What Organized Exchange Mechanism Reassures the Futures Buyer and Seller

question 17

Multiple Choice

What organized exchange mechanism reassures the futures buyer and seller that the obligations of the other party will be fulfilled?

• A) the clearinghouse
• B) the initial margin
• C) marking to market
• D) the maintenance margin

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Definitions:

Insurable Interest

Insurable interest exists when an individual or entity stands to suffer a financial loss or certain types of loss from the damage, loss, or destruction of the property or the life insured.

Document of Title

A legal document evidencing a person's legal right to control the disposal of goods, such as a bill of lading or warehouse receipt.

Bailees

Individuals or entities entrusted with temporary possession of someone else's property.

Revokes Acceptance

The legal act of canceling or withdrawing approval of a previously accepted offer or contract, often due to the discovery of a significant flaw or misrepresentation.