The value of a futures contract between the times when the account is marked-to-market is: A) equal to the difference between the price of a newly issued contract and the settle price at the most recent mark-to-market period. B) never less than the value of a forward contract entered into on the same date. C) the same as the contract price. Your answer: A was correct! Between the mark-to-market account adjustments, the contract value is calculated just like that of a forward contract; it is the difference between the price at the last mark-to-market and the current futures price, (i.e. the futures price on a newly issued contract). though i see A is the answer, ive got an issue with the explanation… the reason is because the value of a forward contract is spot minus forward, but the value of a futures contract (pg 226) is futures price minus previous mark to market price. so the value of futures (between mark to market dates) is not calculated just like forward is it?
Nope, because the new forward price is reset everyday.