The Difference Between a Cash Account and a Margin Account

question 44

Multiple Choice

The difference between a cash account and a margin account is:

• A)a margin account allows the investor up to five days to pay for the entire purchase.
• B)a cash account gives the investor a 2% discount if they pay within 10 days, or the investor has to pay the entire amount within 30 days (2/10 net 30).
• C)a margin account allows the investor to borrow a percentage of the purchase price from the brokerage firm.
• D)a margin account is less risky to the investor.
• E)a cash account requires the stock be kept registered in street name, and a margin account allows the securities to be delivered to the customer.

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Definitions:

Derived Class

A class that inherits properties and behavior from another class, known as the base class or superclass, extending or modifying its functionality.

This

A reference variable in object-oriented programming languages that refers to the current object.

Super

A keyword in many programming languages used to reference the immediate parent class of the current object.

Test Driver

A test driver is a piece of software that sets up and controls the conditions of test execution in order to validate the components or systems under test.