Related to a futures contract, what is the maintenance margin?   Question 14 options:   The amount of money necessary when a loss on a futures position requires you to allocate more funds to return the margin to the initial or original margin level.   The existing balance in the margin account at any time over the lifetime of the contract   The balance in the margin account on the settlement date   The amount of money that is required to open a buy or sell position on a futures contract.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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Related to a futures contract, what is the maintenance margin?

 

Question 14 options:

 

The amount of money necessary when a loss on a futures position requires you to allocate more funds to return the margin to the initial or original margin level.

 

The existing balance in the margin account at any time over the lifetime of the contract

 

The balance in the margin account on the settlement date

 

The amount of money that is required to open a buy or sell position on a futures contract.

Expert Solution
Step 1

A future contract is a contract agreed by buyer or seller of an asset to process purchase or sell of an asset at the specified and date.

 

Step 2

Maintenance margin is the amount asked by the broker from their client who has opened a trading account with the trading company to ensure financial obligation will be met.

 

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