What Is the Purpose of an Initial Margin on a Futures

question 521

Multiple Choice

What is the purpose of an initial margin on a futures exchange?

• A) To cover losses incurred between variation margin payments
• B) To exclude retail investors
• C) To pay reserve requirements
• D) To cover fees due to the clearing house

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Definitions:

Exclusive

Refers to something that is limited to certain people, groups, or areas, often meaning it's not shared or distributed freely.

Civil Matters

Legal issues and disputes that involve private rights and relationships between individual parties, excluding criminal matters.

Criminal Matters

Issues or cases involving violations of laws that relate to conduct considered harmful or dangerous to society as a whole.

Diversity-of-Citizenship

A basis for federal court jurisdiction over a case involving parties from different states or countries.