Step-by-step explanation:

1. Understanding the given information:

   • Purchase price = €50
   • Leverage ratio = 2.5
   • Margin call price = €40

2. Calculate initial margin requirement: Leverage ratio = Total investment / Equity investment 2.5 = Total investment / Equity investment Let equity = E, then total investment = 2.5E

   Since total investment = €50 (purchase price), we have: 2.5E = €50 E = €50 / 2.5 = €20

   Initial margin = Equity / Total investment = €20 / €50 = 40%

   So initial margin requirement is 40%.

3. Calculate maintenance margin requirement: At margin call price of €40, the equity value is: Equity = Market value - Loan amount

   Loan amount = Total investment - Initial equity = €50 - €20 = €30

   At price €40: Market value = €40 Equity = €40 - €30 = €10

   Maintenance margin = Equity / Market value = €10 / €40 = 0.25 = 25%

4. Verification:

   • Initial margin: 40%
   • Maintenance margin: 25%
   • Margin call occurs when price drops to €40, which gives equity of €10 (25% of €40)

Therefore, the maintenance margin requirement is 25%, which corresponds to option B.