Use this information to answer the questions 3-4.
You purchase a futures contract for September delivery September 15 th of 62,500 pounds on March 15 th . The pound futures exchange rate is $1.65 per pound. The bank has a margin requirement of 2 percent.
-To secure the futures contract deal with the bank,you will have to put ______ as a deposit with the bank.
A) $1,250
B) $2,000
C) $2062.5
D) $2087.5

Question

Quizplus · Accepted Answer

The margin requirement is 2 percent of the contract value. The contract value is 62,500 pounds * $1.65 per pound = $102,812.50. The margin deposit is 2 percent of $102,812.50 = $2,062.50.

Use This Information to Answer the Questions 3-4