Ethan Is Preparing for an Exam in His Psychology Class

question 3

Multiple Choice

Ethan is preparing for an exam in his Psychology class.He knows there will an essay he needs to write about one of the main concepts they have studied thus far.To feel confident going into the test, it is best that he:

• A)keeps a sense of perspective.
• B)practice writing essays in order to pace himself when taking the test.
• C)be able to summarize the main concepts in his own words.
• D)create a sample test.

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Definitions:

Maintenance Margin

The minimum amount of capital that must be maintained in a margin account after a purchase or trade, to cover the risk of loss.

Margin Call

A requirement from a broker for an investor to add more cash or securities to their account to mitigate potential losses.

Short 100 Shares

The action of borrowing 100 shares of a stock to sell them with the expectation of buying them back later at a lower price.

Margin Call

A request from a broker to an investor to add more funds or securities to compensate for potential losses.