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-Q1:\ The relative amount of personal funds,or initial equity,an investor has to" put up " when purchasing stock on margin is called the initial margin requirement.



-Q2:\when there is deficit spending in U.S. ,the amount of goods and services that are imported exceed the amount that are exsported.

2007-07-24 23:37:25 · 1 answers · asked by Anonymous in Business & Finance Other - Business & Finance

1 answers

Q1: True
Commodity Margin

An Initial margin is NOT a cost, it is however the deposit required to maintain either a short or long position in a futures contract. Maintenance margin is the amount of initial margin that must be maintained for that position before a margin call is generated. Note that the maintenance margin level is NOT in addition to the initial margin.

Example; assume that the initial margin required to buy or sell a particular commodity contract is $1,000 and the maintenance margin requirement is $750. Should losses on open positions reduce the funds in your trading account $700, you would receive a margin call for the $300 needed to restore your account back to the initial $1,000. If there were not excess funds in the account in order to bring the initial amount back up to $1,000, that position would create a margin call, a situation in which the account would need to be either immediately met with additional funds or the position liquidated to cover the margin call.

Q2: False
That is a Trade deficit, defined as a negative balance of trade, i.e. imports exceed exports. opposite of trade surplus.

Deficit spending is when public spending by a government exceeds the revenue from taxation and the govt has to finance its spending by borrowing.

2007-07-24 23:56:34 · answer #1 · answered by Sandy 7 · 0 0

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