The Required Initial Margin of a Futures Trading Account Can

question 22

Multiple Choice

The required initial margin of a futures trading account can be viewed as

• A) A down payment on the contract
• B) A commission to the broker
• C) A maintenance fee
• D) A performance guarantee
• E) None of the above

---

Definitions:

Allowance Method

The allowance method is an accounting technique that estimates uncollectible accounts receivable, adjusting for debts likely not to be collected.

90-Day Note

A short-term debt security that matures in 90 days, typically used in the financing of inventory, accounts receivable, or other short-term needs.

Note Receivable

Note Receivable is a financial asset representing a written promise to receive a specific amount of money from another party on a determined future date or dates.

Credit Sales

Sales transactions where the payment is delayed as per agreed terms between the seller and the buyer.