If you bought a futures contract for £2.60 per bushel and the contract ended at £2.70 after several days of trading of £2.52,£2.57,£2.62,£2.68,and £2.70.What would the mark to market sequence be?

Question

Quizplus · Accepted Answer

To calculate the mark to market sequence, we need to subtract the contract price from each day's settlement price. 
Day 1: £2.52 - £2.60 = -£0.08
Day 2: £2.57 - £2.60 = -£0.03
Day 3: £2.62 - £2.60 = £0.02
Day 4: £2.68 - £2.60 = £0.08
Day 5: £2.70 - £2.60 = £0.10

Therefore, the mark to market sequence is -£0.08, £0.05, £0.05, £0.06, £0.02, which corresponds to choice A.

If You Bought a Futures Contract for £2