CFA Practice Question
The minimum margin that must be supplied when a margin transaction is created is the ______.
B. initial margin
C. call margin
A. maintenance margin
B. initial margin
C. call margin
Correct Answer: B
There exists a margin that must be established at the initiation of a margin transaction (assuring the creditworthiness of the account).
User Contributed Comments 3
| User | Comment |
|---|---|
| achu | Remember, initial margin may be higher than the maintenance margin! |
| johntan1979 | Shouldn't initial margin ALWAYS be higher than maintenance margin? Otherwise, you will already get a margin call even before you get started. |
| irapp92 | @johnatn1979 yes, it would make no logical sense to be anything but. I believe the current boilerplate requirements are initial margin (reg T) of 50% and a minimum maintenance margin of 25% for long positions. |