A company has derivatives transactions with Banks A$,$ B$,$ and C which are worth $+$$$20$

million, $$$$15$ million, and $$$$25$ million, respectively to the company. How much margin or

collateral does the company have to provide in each of the following two situations?

a$)$ The transactions are cleared bilaterally and are subject to one$-$way collateral agreements

where the company posts variation margin, but no initial margin. The banks do not have to

post collateral.

b$)$ The transactions are cleared centrally through the same CCP and the CCP requires a

total initial margin of $$10$ million.