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.

---

Definitions:

Harmful Consequences

Negative outcomes or damages that result from actions, decisions, or behaviors that are detrimental to the health, wellbeing, or environment.

Academic Grades

Symbols or numbers used to represent a student's performance in their educational pursuits.

IQ Scores

Numerical measures of a person's intellectual abilities based on standardized tests.

High Self-esteem

A positive evaluation of oneself, reflecting a person's belief in their own worth and abilities.