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Suppose That a Futures Trader Has an Initial Margin of $2,000

Question 7

Multiple Choice

Suppose that a futures trader has an initial margin of $2,000 in her brokerage account.The maintenance margin is 75 percent.If the equity in her account falls by $1,200,the account holder has to come up with a variation margin of:


A) $300 in cash,or a letter of credit,or short-term Treasury securities
B) $300 in cash
C) $800 in cash,or a letter of credit,or short-term Treasury securities
D) $800 in cash
E) None of these answers are correct.

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