Will Purchased 3 Futures Contracts on Corn

question 60

Multiple Choice

Will purchased 3 futures contracts on corn. The contract size is 5,000 bushels and the price is quoted in cents per bushel. Assume the initial margin requirement is 4.5% of the contract value. What is the amount of the initial margin if the futures quote is 624?

• A)$140.40
• B)$421.20
• C)$1,404
• D)$2,808
• E)$4,212

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Definitions:

Standard Deviation

A measure of the amount of variation or dispersion of a set of values, indicating how much the values deviate from the mean of the set.

Free Throw Percentages

A statistical measure in basketball that represents the ratio of free throws made to the total number of free throw attempts.

Tournament

A competition involving a relatively large number of competitors, all participating in a sport or game.

Standard Deviation

An indicator that assesses the degree to which data values are spread out or clustered around the mean.