New RBI Grade B 2025 Notification will come Soon! Enroll Here

    Question

    In case when prices are going down, buyer of a futures

    position will be given a call for the margin:
    A When the margin falls below the maintenance margin Correct Answer Incorrect Answer
    B When the margin falls below initial margin but is still above maintenance margin Correct Answer Incorrect Answer
    C When the margin is above the maintenance margin Correct Answer Incorrect Answer
    D When the margin is zero Correct Answer Incorrect Answer
    E None of the above Correct Answer Incorrect Answer

    Solution

    If the margin account falls below the maintenance margin, a broker may call to deposit more funds and must bring the margin account back to initial margin amount. The amount necessary to this is called a variation margin

    Practice Next

    Relevant for Exams: