A Company Enters into a Short Futures Contract to Sell

question 19

Multiple Choice

A company enters into a short futures contract to sell 50,000 units of a commodity for 70 cents per unit.The initial margin is $4,000 and the maintenance margin is $3,000.What is the futures price per unit above which there will be a margin call?

• A) 78 cents
• B) 76 cents
• C) 74 cents
• D) 72 cents