Which one of the following statements is true?
A) The maintenance margin is the amount of money you post with your broker when you buy or sell a futures contract.
B) If the value of the margin account falls below the maintenance-margin requirement, the holder of the contract will receive a margin call.
C) A margin deposit can only be met with cash.
D) All futures contracts require the same margin deposit.
E) The maintenance margin is set by the producer of the underlying asset.

Question

Quizplus · Accepted Answer

The maintenance margin is a minimum amount of equity that must be maintained in a margin account. If the account's value falls below this level, the account holder will receive a margin call, requiring them to deposit more funds to meet the maintenance margin requirement. This process ensures that the account has sufficient funds to cover potential losses.

Which One of the Following Statements Is True