The daily settlement of obligations on futures positions is called _____________.
A) a margin call
B) marking to market
C) a variation margin check
D) initial margin requirement

Question

Quizplus · Accepted Answer

Marking to market refers to the daily settlement of obligations on futures positions, whereby gains and losses are settled by transferring money between the parties involved. A margin call refers to a demand for additional funds to be deposited into an account due to losses incurred, while initial margin requirement refers to the minimum amount of funds that must be deposited to initiate a futures position. A variation margin check refers to a process whereby the margin requirements for futures positions are adjusted based on changes in the value of the underlying assets.

The Daily Settlement of Obligations on Futures Positions Is Called