Logan sold a corn futures contract using the initial margin of $2,700. His maintenance margin is $2,000. The price of began to rise in early summer, but Logan wants to keep his contract
When his margin falls below $2,000 (minimum maintenance)
A) his contract will be automatically sold or canceled.
B) he does not need to do anything since the most he can lose is $2,700.
C) he will need to deposit at least $700 with his broker to bring his margin back up to the initial deposit.
D) he will need to deliver the corn immediately.
Answer: C
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