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Answer: Marking to market is an arrangement between the broker and the individual client that does not involve the exchange
The false statement is **B**. - **Marking to market** is not merely an agreement between a broker and a client; it is part of the futures exchange/clearinghouse process that settles gains and losses daily. - **A** is true: long and short futures positions typically have the same margin requirements. - **C** is true: brokers may impose higher margin requirements than the exchange minimum, but not lower ones. - **D** is true: funds above the required initial margin are generally withdrawable. **Correct answer: B**
Author: Manit Arora
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Question-144.3 Futures margin requirements
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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