The Term Futures Margin Refers to

question 61

Multiple Choice

The term futures margin refers to

• A) the percent of potential margin for profit associated with a futures contract.
• B) the "good faith" money the purchaser puts down to ensure that the contract will be carried out.
• C) the interest-earning account associated with a futures contract.
• D) the number of contracts outstanding on a particular futures contract.

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Definitions:

Inelastic

Describes a situation where the demand or supply for a good or service is not significantly altered when the price changes.

Elastic

A characteristic of a product or service indicating that a change in price leads to a significant change in the quantity demanded or supplied.

Laffer Curve

An illustration of the relationship between tax rates and tax revenue, suggesting that there is an optimal tax rate that maximizes revenue.

Tax Rate Reductions

A decrease in the percentage at which income or transactions are taxed by governmental authorities.