An investor holds a long position in futures contracts on an index. The futures contract expires in 3 months and has a futures price of $1,574. The investor posted 1 $37,500 into the margin account at the initiation of the contract. After the contract initiation, the futures price on the index experienced infrequent but dramatic drops. Two days ago, the investor received a margin call and was required to post an additional $17,500 to the margin account. Which of the following is most likely the maintenance margin on the contract? Explain.

(a) $17,500

(b) $18,750

(c) $22,500

Answer rating: 100% (QA)

The answer is b 18750 The maintenance margin is the minimum amount that the investor must maintain i... View the full answer