Marking to market refers to
A)the determination of the prices of options contracts by the interaction of demand and supply.
B)the determination of the prices of futures contracts by the interaction of demand and supply.
C)the settlement of gains and losses on futures contracts each day.
D)the settlement of gains and losses on forward contracts each day.

Question

Quizplus · Accepted Answer

Marking to market refers to the daily settlement of gains and losses on futures contracts. This is done by adjusting the margin account of each participant in the market to reflect any changes in the market value of their positions. This ensures that each participant has sufficient funds to cover their obligations and helps to mitigate counterparty risk.

Marking to Market Refers to