Your Broker Requires an Initial Margin of $4,000 Per Futures

question 3

Multiple Choice

Your broker requires an initial margin of $4,000 per futures contract on soybeans and a maintenance margin of $3,000 per contract. Soybean futures contracts are based on 5,000 bushels and quoted in cents per bushel. Yesterday, you bought six soybean futures contracts at the closing settlement price of 1380. Today, the settlement quote is 1335. All margin calls restore margin levels to their initial margin level. Will you receive a margin call and, if so, for what amount?

• A)no margin call
• B)call for $2,750
• C)call for $8,000
• D)call for $13,500
• E)call for $20,000

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Definitions:

Adolescents

Individuals in the developmental stage between childhood and adulthood, typically between the ages of 13 and 19, characterized by significant physical, psychological, and social changes.

Physical Appearance

The outward look or traits of an individual, including features, body shape, clothing, and other aspects visible to others.

Social Status

The position or rank of a person or group within the society, often determined by wealth, occupation, education, or family lineage.

Erik Erikson

A developmental psychologist and psychoanalyst known for his theory on the psychological development of human beings, particularly his eight stages of psychosocial development.