CFA Practice Question

CFA Practice Question

A trader enters into the long side of 500 Futures contracts each of which requires a margin of $6. The initial Futures price is $50. The maintenance margin is $4. At the end of the first day the settlement price changes to $50.63. What is the dollar margin at the beginning of the second day?
A. 3000
B. 2685
C. 3315
Explanation: dollar margin at the beginning of the second day = initial dollar margin + (settlement price at the end of 1st day - initial futures price) * # of contracts = 500 * 6 + (50.63 - 50)*500 = $3,315.

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