Lupe's Stockbroker Called to Inform Lupe of a Margin Call

question 394

Multiple Choice

Lupe's stockbroker called to inform Lupe of a margin call that requires that she pay $1,000.This indicates that the value of Lupe's stock has:

• A)just announced a stock split.
• B)decreased.
• C)increased.
• D)changed causing the Federal Reserve to increase the margin rate.

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Definitions:

Operating Costs

Expenses associated with the day-to-day operation of a business, excluding financing costs and taxes.

Useful Life

The estimated period over which an asset is expected to be usable for its intended purpose, affecting its depreciation.

Machine

Equipment or apparatus designed to perform a specific task in the manufacturing process.

Present Value

The immediate worth of anticipated money or streams of cash flows, computed with an agreed-upon rate of return.