Will Purchased 3 Futures Contracts on Corn

question 53

Multiple Choice

Will purchased 3 futures contracts on corn.The contract size is 5,000 bushels and the price is quoted in cents per bushel.Assume the initial margin requirement is 4.5 percent of the contract value.What is the amount of the initial margin if the futures quote is 624?

• A) $140.40
• B) $421.20
• C) $1,404
• D) $2,808
• E) $4,212

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Definitions:

Representativeness Heuristic

A mental shortcut used to judge the probability of an event by how much it resembles a typical case.

Simulation Heuristic

The simulation heuristic is a psychological theory that explains how people determine the likelihood of an event based on how easy it is to visualize the event happening.

Exam Question

A query or problem posed during an examination to evaluate a student's knowledge or skills.

Simulation Heuristic

A cognitive heuristic where people determine the likelihood of an event based on how easily they can imagine it happening, influencing their perception of risks and outcomes.