Futures Contracts Require That the Purchaser Deposit an Initial Sum

question 59

Multiple Choice

Futures contracts require that the purchaser deposit an initial sum as collateral. This deposit is called a:

• A) collateralized deposit.
• B) marked market sum.
• C) margin.
• D) settlement.

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Definitions:

Lower Limit

The minimum threshold or boundary for a variable or parameter within a given context, such as statistical control limits.

Cost-Based Pricing

A pricing method that determines the selling price of a product by adding a markup to its total cost.

Mark-Up Percentage

The percentage added to the cost price of goods to cover overhead and profit in the selling price.

Price Elasticity

A measure of how much the quantity demanded of a good responds to a change in the price of that good.