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      Question

      With respect to the futures transactions, the purpose of

      margin is to”
      A Make trades easier Correct Answer Incorrect Answer
      B Reduce price risk for futures investors Correct Answer Incorrect Answer
      C Provides security to the clearinghouse Correct Answer Incorrect Answer
      D All of the above Correct Answer Incorrect Answer
      E None of the above Correct Answer Incorrect Answer

      Solution

      Futures traders post margin as a security to the clearinghouse and it serves to ensure traders will fulfil their obligations.

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