CFA Practice Question

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CFA Practice Question

In futures trading, the exchange clearinghouse has responsibility for which of the following activities?

I. Overseeing the delivery process
II. Guaranteeing transactions
III. Setting daily gains and losses
Correct Answer: I, II and III

User Contributed Comments 7

User Comment
georgek the 'overseeing delivery process' is poorly worded. i don't believe the exchange has a guy on the dock watching the pumping of oil from the tanker to the port.
jpducros Maybe not georgek, but it would be interesting to know if in case of litigation, the clearinghouse would mandate an official to check the respect of the terms of the future.
tichas I doubt the delivery process aspect , i think its beyond the capability of the clearing house
ankurwa10 i don't think actual delivery happens for most of these contracts. Aren't they cash settled mostly?

because, the parties essentially want to mitigate risks (price risk for example). I am curious to know as to how does this work for commodities?
GBolt93 think it means more than they are liable to see that the delivery is completed. Though ankurwa is right that the vast majority of contracts don't actually end with delivery.
Inaganti6 Option 1 !?
Just imagine those trucks with the Chicago Mercantile Exchange logo unloading hundreds of pigs onto your front yard....
jzty Option 1 means that the clearinghouse has to make sure that if a delivery is required, then it has to be done.
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