The amount paid at the time a futures contract is sold
A)represents the maximum loss for the buyer of the contract.
B)represents the maximum profit for the buyer of the contract.
C)is simply a refundable security deposit.
D)is the total value of the goods being traded in the future.

Question

Quizplus · Accepted Answer

The amount paid at the time a futures contract is sold is known as the initial margin, which serves as a security deposit. It represents only a fraction of the total value of the goods being traded in the future. It does not represent the maximum profit or loss for the buyer of the contract.

The Amount Paid at the Time a Futures Contract Is