Question

Marking to market is the process by which the clearing house of an exchange ________.

a. debits and credits the losses and profits to the margin accounts from the daily price changes of futures prices;
b. closes the contract, and opens a new one at the new price forces the investor to go long the currency
c. allows the market forces to affect daily prices
d. until the expiration date closes the old contract and sets the price of a new contract a zero

Answer 1

Answer: The correct answer is "a. debits and credits the losses and profits to the margin accounts from the daily price changes of futures prices;".

Explanation: Marking to market is the process by which the clearing house of an exchange debits and credits the losses and profits to the margin accounts from the daily price changes of futures prices;

The daily settlement of profit and loss is a way of accounting for losses and gains in an operation of an investment portfolio formed by financial assets, valuing the accounting record of all open positions based on prices Current market. These new prices are what will determine the new guarantees that the investor will have to replace in his portfolio and will mitigate an erroneous control of the positions of the clients of the financial entities.