You Purchased Two Futures Contracts on Soybeans at a Price

question 14

Multiple Choice

You purchased two futures contracts on soybeans at a price quote of 1344′0. The initial margin requirement is $4,750 per contract and the maintenance margin is $3,500 per contract. The contract quantity is 5,000 bushels and the price quote is in cents per bushel. What is the lowest the price quote can go before you receive a margin call?

• A)1314′0
• B)1315′0
• C)1319′0
• D)1322′0
• E)1325′0

---

Definitions:

Pareto Principle

The principle that states a small percentage of causes (roughly 20%) often lead to a large percentage of effects (approximately 80%).

ABC Analysis

A method of classifying inventory items into categories based on their importance, such as value or turnover rate, to optimize inventory management.

Inventory Savings

Reductions in the cost associated with holding and managing inventory, typically achieved through more efficient inventory management practices.

Tightly Controlled

Refers to systems or processes that are strictly regulated or managed to ensure desired outcomes.