Which of the following is most likely incorrect regarding futures?
A) All contracts are marked to market each day.
B) Buyers can cancel the futures contract by making an offsetting sale.
C) Both buyer and seller have a margin requirement as good faith deposit.
D) The minimal amount that must be maintained in a margin account is the notional amount.
E) Investors may trade futures on a variety of commodities, ranging from traditional agricultural products to newer energy and base metal contracts.

Question

Quizplus · Accepted Answer

The minimal amount that must be maintained in a margin account is not the notional amount but rather the maintenance margin, which is a set percentage of the initial margin and is lower than the initial margin requirement. The notional amount refers to the total value of a position, a concept that does not directly dictate margin requirements.

Which of the Following Is Most Likely Incorrect Regarding Futures