The "Initial Margin" on a Futures Contract

question 14

Multiple Choice

The "initial margin" on a futures contract:

• A) is a cash deposit the buyer places with the seller as good faith money.
• B) can be cash or U.S. government securities placed with an exchange member.
• C) are U.S. government securities the buyer places with the seller for safekeeping.
• D) are the first installment on the payment for a futures contract.
• E) is the amount by which the futures contract is initially "in the money."

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