The Margin Requirement Will Be Lower Than the Standard Requirement

question 28

Multiple Choice

The margin requirement will be lower than the standard requirement on a stock index futures contract when

• A)The stock market is declining
• B)The futures are used to hedge a portfolio
• C)The investor is establishing a speculative position
• D)None of the above

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Definitions:

Consumers

Organisms that obtain their energy by eating other organisms or organic matter instead of producing their own food, as in the case of plants.

Digestion

The breakdown of food into smaller components that can be absorbed and utilized by the body.

Trophic Level

Trophic level pertains to the position an organism occupies in a food chain, ranging from primary producers at the base to apex predators at the top.

Carnivores

Organisms that primarily consume meat from other animals as their source of nourishment.