Your Broker Requires an Initial Margin of $6,100 Per Futures

question 69

Multiple Choice

Your broker requires an initial margin of $6,100 per futures contract on wheat and a maintenance margin of $4,400 per contract. Wheat futures contracts are based on 5,000 bushels and quoted in cents per bushel. You sold one wheat futures contract yesterday at the closing settlement price quote of 780. Today, the settlement quote is 802. Will you receive a margin call and, if so, for what amount? All margin calls restore the margin level to its initial level.

• A)no margin call
• B)call for $475
• C)call for $1,100
• D)call for $4,750
• E)call for $11,000

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Definitions:

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