Margin Accounts Cannot Be Used To

question 25

Multiple Choice

Margin accounts cannot be used to:

• A) purchase securities using leverage.
• B) borrow money to fund a frivolous vacation.
• C) provide overdraft protection.
• D) take physical delivery on maturity of a futures contract.

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Definitions:

Commission of a Tort

The act of committing a wrongful act, excluding breach of contract, for which a civil action can be brought.

Respondeat Superior

A doctrine under which a principal-employer is liable for any harm caused to a third party by an agent-employee in the course or scope of employment.

Apparent Authority

Apparent authority refers to a situation in which a person appears to be given power to act on behalf of another, thereby binding the principal through the agent's actions, even if the actual authority has not been granted.

Misrepresentation

The act of providing false or misleading information, intentionally or unintentionally, in a transaction.