Logan Sold a Corn Futures Contract Using the Initial Margin

question 25

Multiple Choice

Logan sold a corn futures contract using the initial margin of $2,700.His maintenance margin is $2,000.The price of began to rise in early summer, but Logan wants to keep his contract.When his margin falls below $2,000 (minimum maintenance)

• A)his contract will be automatically sold or canceled.
• B)he does not need to do anything since the most he can lose is $2,700.
• C)he will need to deposit at least $700 with his broker to bring his margin back up to the initial deposit.
• D)he will need to deliver the corn immediately.

Understand the role of inventory management techniques such as just-in-time in reducing inventory levels and costs.

Distinguish between internal and external reporting requirements and their audiences.

Identify the managerial functions of planning, controlling, and directing, and their relevance in managerial accounting.

Appreciate the significance of internal reports in managerial decision-making and their characteristics.

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Definitions:

Confidence Interval

An array of values extracted from sample analysis likely to encompass the value of an undefined population parameter.

Scatter Plot

A type of plot or mathematical diagram using Cartesian coordinates to display values for typically two variables for a set of data, showing how much one variable is affected by another.

SPSS

A comprehensive software package for statistical analysis, widely used in social science research for data management and documentation.

Gasoline

A petroleum-derived liquid mixture used primarily as fuel in internal combustion engines.