A company has derivatives transactions with Banks A, B, and C that 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.