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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