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2. Which of the following statement (s) about Variation Margin and Initial Margin is (are) true? I. Variation Margin is used to cover the possible
2. Which of the following statement (s) about Variation Margin and Initial Margin is (are) true?
I. Variation Margin is used to cover the possible loss in the worst-case scenario. I
I. Variation Margin changes with the market value of the derivative.
III. Initial Margin needs to be segregated but variation margin can be rehypothecated.
IV. Initial Margin has to be posted at the time of a trade.
A. I only; B. I and IV only; C. II and III only; D. II and III, and IV
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