Match the Terms to the Definitions

question 232

Multiple Choice

Match the terms to the definitions.
-A stated amount of capital that cannot be returned to the stockholders unless the corporation is liquidated.

• A)Authorized shares
• B)Issued shares
• C)Outstanding shares
• D)Par value
• E)Stated capital (legal capital)
• F)Preemptive right
• G)Retained earnings
• H)Stock split
• I)Stock option
• J)Stock warrant
• K)Treasury stock
• L)Call provision
• M)Earnings per share
• N)Dividend yield ratio
• O)Dividend payout ratio

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Definitions:

Maintenance Margin

The minimum amount of equity that must be maintained in a margin account to continue holding a position, set by a brokerage to prevent excessive borrowing based on volatile market values.

Margin Call

A margin call occurs when the value of an investor's margin account falls below the broker's required minimum level, prompting the investor to either deposit more funds or sell assets to cover the shortfall.

Margin Deposit

A deposit required by a broker from a client when they borrow from the broker to buy securities, serving as collateral for the loan.

Long Positions

Investing strategy where an investor buys a security with the expectation that it will increase in value.