Margin Accounts Are Required to Maintain a Minimum Balance Which

question 22

Multiple Choice

Margin accounts are required to maintain a minimum balance which is usually lower than the initial margin balance,called a:

• A)continuing balance.
• B)maintenance margin.
• C)futures balance.
• D)call balance.

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Definitions:

Profitability Index

A financial tool used to determine the desirability of an investment or project, calculated as the present value of future cash flows divided by the initial investment.

Present Value

The present value of a future amount of money or series of payments, calculated based on a certain rate of return.

Initial Investment

The amount of money used to start a business or project.

Cash Operating Costs

The expenses a company incures during its day-to-day operational activities, usually excluding non-cash costs like depreciation.