Purchasers and sellers of futures are generally required to deposit an initial margin in the range of ___________ with the exchange's clearinghouse to reduce credit risk.
A) 3 to 6 percent
B) 3 to 6 dollars
C) 10 to 15 percent
D) 10 to 15 dollars

Question

Quizplus · Accepted Answer

Initial margins for futures contracts are typically set in the range of 3 to 6 percent of the contract value. This requirement is to mitigate credit risk by ensuring both parties have a financial stake in the contract's fulfillment.

Purchasers and Sellers of Futures Are Generally Required to Deposit