CFA Practice Question

There are 275 practice questions for this study session.

CFA Practice Question

The minimum margin that must be supplied when a margin transaction is created is the ______.

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.
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