Purchasers and Sellers of Futures Are Generally Required to Deposit

question 147

Multiple Choice

Purchasers and sellers of futures are generally required to deposit an initial margin in the range of ___________ with the exchange's clearinghouse to reduce credit risk.

• A) 3 to 6 percent
• B) 3 to 6 dollars
• C) 10 to 15 percent
• D) 10 to 15 dollars

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Definitions:

Dividend Revenue

Income received from investments in the form of dividends, typically from shares of stock held in another company.

Cost Method

An accounting approach used to record investments, where the investment is recorded at its acquisition cost without recognizing interim income or losses.

Long-Term Investment

An asset that a company intends to hold for more than one year for the purpose of generating revenue.

Common Stock

Equity shares of a corporation that provide voting rights and represent a claim on a portion of the company's profits in the form of dividends.