The process by which invest on margin accounts are credited or debited to reflect daily trading gains or losses is referred to as the ____ process.
A) marked-to-market
B) hedge rationing
C) daily settlement
D) book-to-market
E) account realisation

Question

Quizplus · Accepted Answer

The marked-to-market process involves revaluing positions regularly based on current market prices, resulting in either a credit or debit to the margin account to reflect daily trading gains or losses. This helps ensure that the account maintains the required margin level and reduces the risk of default. Hedge rationing and book-to-market are not terms commonly used in the context of margin trading, while daily settlement and account realisation do not accurately describe the specific process of adjusting margin accounts based on market value fluctuations.

The Process by Which Invest on Margin Accounts Are Credited