The Margin Requirement Will Be Lower Than the Standard Requirement

question 23

Multiple Choice

The margin requirement will be lower than the standard requirement on a stock index futures contract when:

• A)the stock market is declining.
• B)the futures are used to hedge a portfolio.
• C)the investor is establishing a speculative position.
• D)None of the above

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Definitions:

Accounts Payable

Liabilities or debts owed by a company to suppliers or creditors for goods or services purchased on credit.

Purchases Journal

A specific type of accounting record where a business records all transactions related to the acquisition of goods intended for resale or for use in production.

Cash Receipts Journal

A specialized accounting journal used to record all cash inflows of a business, including sales and debt collections.

Headings

Titles or captions of sections of a document or article, designed to introduce new sections and help readers understand the structure and content.