Which one of the following statements is true?

Question

Quizplus · Accepted Answer

The maintenance margin is the minimum amount of money that must be maintained in a margin account by a futures trader. If the value of the margin account falls below the maintenance margin, the trader receives a margin call. Hence, option B is the correct statement. Option A is incorrect because the initial margin is the amount of money you post with your broker when you buy or sell a futures contract. Option C is incorrect because margin deposits can be met with cash, securities, or other eligible collateral. Option D is incorrect because different futures contracts may have different margin requirements based on factors such as volatility and liquidity. Option E is incorrect because the exchange sets the maintenance margin for each futures contract.

Which One of the Following Statements Is True