A performance bond is
A)put up by both parties in a futures contract.
B)paid only by the buyer of a futures contract to make sure she or he does not renege on the deal.
C)collected in advance by the clearinghouse so that both parties can participate in futures agreements.
D)Both a and c are correct.

Question

Quizplus · Accepted Answer

A performance bond, also known as margin, is collected by the clearinghouse from both parties in a futures contract to ensure they fulfill their obligations, making both A and C correct.

A Performance Bond Is