CFA Practice Question

CFA Practice Question

The ______ margin is generally about seventy-five percent of the amount of the ______ margin.
A. variation; initial.
B. maintenance; initial.
C. initial; daily settlement.
Explanation: When the value of the initial margin on deposit with the broker reaches a certain level, called the maintenance margin, the trader is required to replenish the margin, bringing it back to its initial level.

User Contributed Comments 1

User Comment
alles Explanation is correct for futures. For equity, margin must only be brought back up to the maintenance level.
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