The sequence of funds usage in the event of a member default is as follows:

1. Initial margin paid by the member,
2. Default fund contribution made by the member,
3. Default fund contributions made by other members, and
4. Equity capital provided by the exchange.

The initial margin is the first line of defense. It is the collateral that the defaulting member has to provide to the CCP at the time of entering into a contract. If the initial margin is insufficient to cover the losses, the CCP then uses the default fund contribution made by the defaulting member. If the losses still exceed these resources, the CCP taps into the default fund contributions made by other non-defaulting members. Finally, if all these resources are exhausted, the CCP uses its own equity capital provided by the exchange.

Choice A is incorrect. The default fund contribution made by the defaulting member is not the first resource that a CCP taps into in case of a member's default. The initial margin posted by the defaulting member is used first as it serves as a buffer for potential losses.

Choice C is incorrect. Similar to Choice A, this sequence incorrectly places the default fund contribution made by the defaulting member before the initial margin posted by them.

Choice D is incorrect. This order reverses the logical sequence, suggesting that contributions from other members and exchange equity would be used before the defaulting member's own resources, which is not how CCP loss waterfall structures work.