With Regard to Futures Contracts, What Does the Word "Margin

question 16

Multiple Choice

With regard to futures contracts, what does the word "margin" mean?

• A) It is the amount of the money borrowed from the broker when you buy the contract.
• B) It is the maximum percentage that the price of the contract can change before it is marked to market.
• C) It is the maximum percentage that the price of the underlying asset can change before it is marked to market.
• D) It is a good-faith deposit made at the time of the contract's purchase or sale.
• E) It is the amount by which the contract is marked to market.

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Definitions:

Secure Neighborhood

An area or community designed or protected in a way that minimizes the risk of crime, providing a safe environment for its residents.

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A financial product sold by insurance companies to protect individuals and businesses against potential future losses in return for a premium.

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Insurance With Deductibles

A type of insurance policy where the policyholder is required to pay a specified amount of loss before the insurance coverage begins paying out.