Answer: zero at the end of each trading day.

## Explanation The key difference between forward and futures contracts is the **marking-to-market** feature of futures contracts. **Forward Contracts:** - Are settled only at expiration - Value can accumulate over time - No daily settlement **Futures Contracts:** - Are marked to market daily - Gains and losses are settled at the end of each trading day - Contract value resets to zero after daily settlement - This daily settlement process eliminates credit risk Options B and C are incorrect because: - Both forward and futures contract values are calculated based on carry benefits and financing costs - The carry arbitrage model applies to both types of contracts Therefore, the correct answer is **A** - futures contract values are zero at the end of each trading day due to the daily marking-to-market process.

Author: LeetQuiz Editorial Team