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:

Distributed

Spread over a wide area or among a large number of people or entities.

O Proposition

In traditional logic, a categorical proposition that is universal in quantity and negative in quality, stating that some members of a category do not belong to another category.

Affirmative Singular Proposition

A statement that positively asserts the existence or some characteristic of a single specific subject.

Distributed

A term in logic referring to when all instances of a subject are accounted for in a statement.