A Margin Account

question 26

Multiple Choice

A margin account

• A) can be opened by any investor who wants to purchase securities by charging them to his/her credit card.
• B) is permitted only in wrap accounts.
• C) allows an investor to borrow a portion of the purchase price at a reasonable rate of interest.
• D) allows an investor to borrow one hundred percent of the cost of the securities purchased.

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Definitions:

Economic Resources

These are the assets, materials, and inputs used to produce goods and services, including labor, capital, and natural resources.

Opportunity Costs

The value of the foregone alternative when a decision is made; essentially, the cost of choosing one option over another.

Production Possibilities Curve

A graphical representation showing the maximum possible output combinations of two goods that can be produced with available resources and technology.

Society's Resources

The assets, both natural and human-made, available to a society for producing goods and services.