Purchasers and Sellers of Futures Are Generally Required to Deposit

question 100

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
• E)none of the above.

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Definitions:

Random Variables

Variables whose values depend on outcomes of a stochastic (random) phenomenon.

Nature

The intrinsic physical and material world all around us, not made or caused by humankind.

Normal Random Variable

A variable that follows a normal distribution, characterized by its mean and standard deviation.

Z-score

A numerical measurement that describes a value's relationship to the mean of a group of values, measured in terms of standard deviations from the mean.