Which of the below statements is TRUE?

Question 2Answer

a.

Futures contracts are marked to market at the end of most trading days.

b.

The parties in a forward contract are not exposed to credit risk because either party may not default on the obligation.

c.

For a forward contract that is not marked to market, there are interim cash flow effects because no additional margin is required.

d.

A forward contract may or may not be marked to market, depending on the wishes of the two parties.