Consider the following two statements: (i) mark-to-the-market provisions protect the seller of a futures contract if the market price of a
Product drops between the contract date and the delivery date.
(ii) mark-to-the-market provisions protect the buyer of a futures contract if the market price of a
Product increases between the contract date and the delivery date.
A) (i) is correct, (ii) is incorrect.
B) (ii) is correct, (i) is incorrect.
C) (i) and (ii) are both correct.
D) (i) and (ii) are both incorrect.
E) (i) and (ii) are both correct only if it is a forward contract.
Correct Answer:
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