Your broker requires an initial margin of $4,500 per futures contract on soybeans and a maintenance margin of $3,000 per contract.Soybean futures contracts are based on 5,000 bushels and quoted in cents per bushel.Yesterday,you bought 5 soybean futures contracts at the closing settlement price of 1372.Today,the settlement quote is 1340.All margin calls restore margin levels to their initial margin level.Will you receive a margin call and if so,for what amount?
A) no margin call
B) call for $1,425
C) call for $2,487
D) call for $4,650
E) call for $8,000

Question

Quizplus · Accepted Answer

Price change per contract = 5,000 × ($13.40 - $13.72) = -$1,600
Current margin level = $4,725 - $1,600 = $3,125, which is less than the maintenance level.
Margin call = 5 × $1,600 = $8,000

Your Broker Requires an Initial Margin of $4,500 Per Futures