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Basic Question 4 of 16
The minimum margin that must be supplied when a margin transaction is created is the ______.
B. initial margin
C. call margin
A. maintenance margin
B. initial margin
C. call margin
User Contributed Comments 3
| User | Comment |
|---|---|
| achu | Remember, initial margin may be higher than the maintenance margin! |
| johntan1979 | Shouldn't initial margin ALWAYS be higher than maintenance margin? Otherwise, you will already get a margin call even before you get started. |
| irapp92 | @johnatn1979 yes, it would make no logical sense to be anything but. I believe the current boilerplate requirements are initial margin (reg T) of 50% and a minimum maintenance margin of 25% for long positions. |
I passed! I did not get a chance to tell you before the exam - but your site was excellent. I will definitely take it next year for Level II.
Tamara Schultz
Learning Outcome Statements
compare positions an investor can take in an asset
calculate and interpret the leverage ratio, the rate of return on a margin transaction, and the security price at which the investor would receive a margin call
CFA® 2025 Level I Curriculum, Volume 3, Module 1.