easy · FRM Part 1
The 'initial margin' in futures trading is often compared to a good-faith deposit.
Why is it NOT considered a down payment?
- Because it is only required for traders taking short positions
- Because the full notional value of the asset is not being transferred at inception
- Because it is paid in installments over the life of the contract
- Because it is held by the exchange rather than the seller
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More FRM Part 1 practice
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