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

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Definitions:

Marginal Revenue

The additional income earned by selling one more unit of a good or service.

Profit Maximization

The process or strategy by which a firm determines the price and output level that returns the greatest profit.

Block Pricing Scheme

A pricing strategy where different quantities of a product or service are sold at different prices, typically decreasing with volume.

Marginal Cost

The increased cost resulting from the production of an extra unit of a product or service.