When Opening a Futures Position a Trader Will Pay

question 4

Multiple Choice

When opening a futures position a trader will pay:

• A)brokerage fees
• B)an initial margin payment
• C)the futures price
• D)brokerage fees and an initial margin payment
• E)brokerage fees, an initial margin payment and the futures price.

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Definitions:

Invested Assets

Assets that are purchased or acquired with the expectation that they will generate income or increase in value over time.

Target Cost

The estimated price for a product or service that is determined by subtracting a desired profit margin from the competitive market price.

Profit Margin

The ratio or percentage of profit to sales, reflecting the efficiency with which a company or business unit generates income relative to its revenue.

Competition-Based Method

A method of price setting based on the price offered by competitors.