The Value of a Futures Contract Immediately After Being Marked

question 31

Multiple Choice

The value of a futures contract immediately after being marked to market is

• A)numerically equal to the daily settlement amount
• B)the spot price plus the original forward price
• C)equal to the amount by which the price changed since the contract was opened
• D)simply zero
• E)none of the above

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Definitions:

Cooperate

The act of working together willingly toward a common goal or purpose, especially in a business or legal context.

Compensate

To provide something, typically money, in recognition of loss, suffering, or injury incurred; recompensation.

S Corporation

A form of corporation that meets specific Internal Revenue Code requirements, allowing income to be passed through to shareholders and taxed at individual rates.

Shareholders

People or organizations holding stock in a corporation, granting them specific rights and stakes in the business.