You bought a futures contract on corn for $3.55 per bushel and closed the contract five days later at $3.56.The daily closing prices were $3.57,$3.54,$3.53,$3.58,and $3.56.What was the mark-to-market sequence of payments per bushel from (+)and to (−)the clearing house?
A)+$.02,−.03,−.01,+.05,−.02
B)+$.01,−.03,−.01,+.05,−.02
C)+$.02,+.01,−.02,−.06,+.04
D)−$.02,+.03,+.01,−.05,+.02
E)−$.01,+.03,+.01,−.05,+.02

Question

Quizplus · Accepted Answer

The mark-to-market sequence of payments is calculated based on the daily change in the closing prices compared to the previous day. Starting from the initial purchase price of $3.55, the sequence is as follows: Day 1: $3.57 - $3.55 = +$.02, Day 2: $3.54 - $3.57 = −$.03, Day 3: $3.53 - $3.54 = −$.01, Day 4: $3.58 - $3.53 = +$.05, Day 5: $3.56 - $3.58 = −$.02.

You Bought a Futures Contract on Corn for $3