Which One of the Following Statements Is True Regarding Buying

question 26

Multiple Choice

Which one of the following statements is true regarding buying stock on margin?

• A)When buying stock on margin,an investor borrows stock from the brokerage firm.
• B)Usually,a bank arranges for the loan in a margin transaction.
• C)Investors buy on margin because doing so offers them the potential to buy more stock and therefore earn larger returns.
• D)The margin requirement is established by the New York Stock Exchange.
• E)The current margin requirement is 25 percent.

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Definitions:

Licensees

Individuals or entities that are granted permissions by a licensor to engage in certain activities under specified conditions.

Invitees

Individuals who are invited onto a property for the benefit of the property owner, having a higher level of protection under premises liability laws.

Risk Of Harm

The potential for injury, damage, or adverse effects in a particular situation or from a specific action.

Duty To Protect

A legal obligation imposed on individuals or entities, requiring them to take reasonable steps to protect others from foreseeable harm.