1. Marking to market is a process that A. ensures that the buyers and sellers re

ID: 2718974 • Letter: 1

Question

1. Marking to market is a process that

A. ensures that the buyers and sellers receive what the contract promises.

B. always requires the sellers of contracts to transfer funds to the buyers of contracts.

C. buyers and sellers can request for an additional fee when the contract is created

2. Considering a put option, an increase in the strike price:

A. causes the intrinsic value of the option to decrease if it is above zero.

B. causes the intrinsic value of the option to increase if it is above zero.

C. causes the value of the option to decrease.

3. At expiration, the time value of an option:

A. is greater than the intrinsic value.

B. is zero.

C. is less than the intrinsic value

1. b. always requires the sellers of contracts to transfer funds to the buyers of the contracts.

2.b. causes the intrinsic value of the option to increase if it is above zero.

3.c. is less than the intrinsic value.

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