Derivatives Professional Certificate

How does the mark-to-market (fair) value of a (fixed) payer commodity swap change, when all forward prices for the commodity decline, over the term of the swap? Assume everything else remains unchanged.

A) The mark-to-market value is unchanged.

B) The mark-to-market value increases.

C) The mark-to-market value decreases.

D) The impact on the mark-to-mark value is ambiguous.

Reveal the Answer

The answer is C) The mark-to-market-value decreases.

Derivatives Professional Certificate

Develop a comprehensive, practical understanding of derivative instruments including market conventions, contract specifications, valuation, trading strategies and the regulation of derivatives markets..

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Derivatives Alum:
Talal Alfi

Derivatives Professional Certificate

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