Value of Futures

CFA Level II Derivatives
#1

Question No 1
Comment 1: “A futures contract will have positive value after marking to market if the future price is up on that day.” Comment 1 is best described as:
Answer: incorrect as the value of the futures contract should be zero after marking to market.
Explanation: The value of a futures contract will reset to zero after marking-to-market.

Question No 2
The value of a futures contract between the times when the account is marked-to-market is:
Answer: equal to the difference between the price of a newly issued contract and the settle price at the most recent mark-to-market period.
Explanation: Between the mark-to-market account adjustments, the contract value is calculated just like that of a forward contract; it is the difference between the price at the last mark-to-market and the current futures price, (i.e. the futures price on a newly issued contract). The mark-to-market of a futures contract is the payment or receipt of funds necessary to adjust for the gains or losses on the position. This adjusts the contract price to the ‘no-arbitrage’ price currently prevailing in the market.

Now my concern is, isn’t the answers contradicting each other? Is it zero or the difference between recent marked to market and newly issued contract? Thanks in advance.

#2

For question 1, as I understand that future performs the mark-to-market transaction and at the end of the day it will pay you gain/loss if compared the closing price at this day and the previous one. Therefore, value at each day after you receive gain/loss from future contract will go back to 0 and it will be reflected on your trading account and it happens after MTM.
For question 2, understandably it occurs at or before MTM, then, the formula will be as what they demonstrated at answer.
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You can read the bottom line of page 9 in curriculum to understand more.