The effect of marking a futures contract to market is similar to:
A) requiring daily payments from the contract buyer.
B) requiring daily payments from the contract seller.
C) closing the current position and opening a new position daily.
D)imposing a daily fee on both buyers and sellers.

Question

Quizplus · Accepted Answer

Marking a futures contract to market involves adjusting the contract's value daily to reflect current market prices, effectively simulating the closing of the existing position and opening of a new one at the current market price. This ensures the contract value remains current with market conditions.

The Effect of Marking a Futures Contract to Market Is