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:

Actual Overhead Costs

The real costs incurred for overhead in a specific period, as opposed to budgeted or standard overhead costs.

Jobs

Specific tasks or projects to be completed as part of the operations of a business, often referring to employment positions or work assignments.

Debit Balance

A condition where the sum of debits in an account exceeds the sum of credits, common in asset and expense accounts.

Actual Overhead Costs

The real expenses associated with manufacturing overhead, including all indirect costs incurred.