Exhibit 20.2 Use the Information Below for the Following Problem(S)

question 38

Multiple Choice

Exhibit 20.2
Use the Information Below for the Following Problem(S)
A futures contract on Treasury bond futures with a December expiration date currently trade at 103:06. The face value of a Treasury bond futures contract is $100,000. Your broker requires an initial margin of 10%.
-Refer to Exhibit 20.2.Calculate the initial margin deposit.

• A) $10,000
• B) $10,360.50
• C) $10,318.75
• D) $10,230.63
• E) $10,429.35

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Definitions:

FUTA Payable

The liability account for the federal unemployment tax that employers must pay on behalf of their employees.

SUTA Payable

The liability account used to record the amounts owed by an employer for state unemployment taxes.

Payroll Tax Expense

Expenses that a business incurs to cover government taxes on employee wages, including social security and Medicare taxes in the United States.

Union Dues

Membership fees paid by workers to labor unions for representation and services provided.