1 the difference between the current spot price of an asset, Ask an Expert

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1. The difference between the current spot price of an asset and the corresponding futures price is known as the ___ for the futures.

a. spread. b. cost of carry. c. basis. d. index arbitrage.

2. If funds rise above the initial margin requirement as a result of marking to market, they may be

a. automatically rolled over to purchase more of the same futures contracts. b. withdrawn by the clearinghouse and placed in an interest-bearing account. c. used to satisfy undermargined positions in other contracts. d. withdrawn by the investor.

3. Futures contracts differ from forward contracts in that ________.

a. futures contracts are standardized and performance of each party is guaranteed by the clearinghouse. b. futures contracts are standardized and require a daily settling of any gains or losses. c. futures contracts are standardized, performance of each party is guaranteed by a clearing house, and they require a daily settling of any gains or losses. d. performance is guaranteed by a process known as marking to market.

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92742866

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