Questions 11 and 12 below are based on the following information and assumptions:

• AAA takes a Long position in 1 futures contract on cheese. The cheese futures contract has contract size = 100 units (multiplier).
• BBB takes a Short position in 1 futures contract on cheese. The cheese futures contract has contract size = 100 units (multiplier).
• The value of 1 futures contract is $10,000 (= $100 *100).
• The Margin Account is 10% of the value of a futures contract, i.e., the Margin Requirement is $1000 (This is also the Initial Margin).
• The Maintenance Margin = 75%*$1000 = $750
• The following table provides information of Futures Price () from Time 0 to 3:

Time t	Futures Price ()	Change in Dollar Value of One Futures Contract from time t-1 to t (note: each contract has multiplier = 100)
Time 0	$100
Time 1	$101	= +$1*100 = +$100
Time 2	$105	= +$4*100 = +$400
Time 3	$105	= $0*100 = $0

11. Question: given the above information, when does AAA (with Long position in futures) experience a Margin Call?

1. AAA experiences a margin call at Time 2 only
2. AAA experiences a margin call at Time 3 only
3. AAA experiences margin calls at Time 2 and Time 3
4. AAA does not experience any margin call from Time 1 to Time 3

Answer: _______________

12. Question: given the above information, when does BBB (with Short position in futures) experience a Margin Call?

1. BBB experiences a margin call at Time 2 only
2. BBB experiences a margin call at Time 3 only
3. BBB experiences margin calls at Time 2 and Time 3
4. BBB does not experience any margin call from Time 1 to Time 3

Answer: _______________