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Answer: Marking to market is an arrangement between the broker and the individual client that does not involve the exchange
**B is FALSE.** Marking to market is not merely an arrangement between the broker and the client. It involves the exchange as well, because gains and losses are transferred through the exchange mechanism between brokers of long and short positions. The other statements are true: - **A**: Margin requirements are generally the same for long and short futures positions. - **C**: Brokers may require higher margins than the exchange minimum, but not lower. - **D**: The investor can typically withdraw excess funds above the initial margin requirement.
Author: Manit Arora
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Q-144.3 Each of the following is TRUE except for:
A
Margin requirements are the same on the short futures position as they are on the long futures position
B
Marking to market is an arrangement between the broker and the individual client that does not involve the exchange
C
Brokers can require higher margins from clients than those specified by the exchange, but they cannot require lower margins than those specified by the exchange
D
The investor can typically withdraw any balance in the margin account in excess of the initial margin
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