The correct answer is B: $0.

Detailed Step-by-Step Solution (FRM Part 1 Style):

1. Calculate the contract size and confirm number of contracts (given, but for completeness):
   Futures index level = 1,000
   Multiplier = 250
   Value per contract = 1,000 × 250 = $250,000
   Cash to equitize = $15,000,000
   Contracts needed = 15,000,000 ÷ 250,000 = 60 contracts (long position).

2. Initial margin posted:
   Initial margin per contract = $12,500
   Total initial margin = 60 × 12,500 = $750,000
   (This is deposited when the position is opened.)

3. Maintenance margin requirement:
   Maintenance margin per contract = $10,000
   Total maintenance margin = 60 × 10,000 = $600,000

4. Mark-to-market at end of Day 1:
   New futures index level = 995
   Loss per point = $250 (the multiplier)
   Loss per contract = (1,000 – 995) × 250 = 5 × 250 = $1,250
   Total loss on 60 contracts = 60 × 1,250 = $75,000

5. Margin account balance after daily settlement:
   Starting balance = $750,000
   Minus daily loss (variation margin settlement) = –$75,000
   New balance = $675,000

6. Check against maintenance margin:
   $675,000 > $600,000 (still well above the maintenance level).
   → No margin call is issued.

Key FRM Concept: Variation Margin vs. Margin Call

• Daily variation margin (or settlement variation) is always calculated and settled via mark-to-market. The losing party (here, the long) pays the $75,000 loss to the clearinghouse, which is debited directly from the margin account.

• However, the phrase “variation margin does the portfolio manager have to advance” in FRM-style questions typically refers to the additional funds the manager must deposit (i.e., the margin call amount) when the account equity falls below the maintenance margin.

  In this case, because the balance remains above maintenance margin after the loss, no additional cash needs to be advanced. The $75,000 is simply deducted from the existing margin account, and the position can continue without further action.

• If the balance had fallen below $600,000, the manager would receive a margin call and would have to deposit enough variation margin to restore the account back to the initial margin level ($750,000).

Why the Other Options Are Incorrect:

• A: $30,000 — No basis (perhaps a miscalculation of something like half the loss or wrong multiplier).
• C: $300,000 — Far too large; no relation to the numbers.
• D: $75,000 — This is the daily mark-to-market loss, but it does not require an additional deposit (“advance”) because the account stays above maintenance.

This question tests understanding of futures margin mechanics (daily settlement + margin call trigger), a core topic in the Financial Markets and Products reading of FRM Part 1. The wording “have to advance” is the key trick — it implies an out-of-pocket additional payment, which is only required on a margin call.

Final Answer: B: $0