The Purpose of a Margin Account for a Futures Contract

question 44

Multiple Choice

The purpose of a margin account for a futures contract is to:

• A) guarantee a minimum margin of profit for the contract holder.
• B) allow futures traders to have more than one contract at once.
• C) provide a cushion for the exchange against defaults on the contract.
• D) hold interest payments until expiration.

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Definitions:

Trust

Firm belief in the reliability, truth, ability, or strength of someone or something.

Self-Awareness

Self-Awareness is the conscious knowledge of one's own character, feelings, motives, and desires.

Peak Communication

The most effective or highest level of exchange of information between individuals or groups, marked by clear understanding and mutual comprehension.

Johari Window

A model that describes the relationship between self-disclosure and self-awareness, used in understanding personal and interpersonal communication.