Last Week, Danielle Purchased 200 Shares of High Tech Heaven

question 115

Multiple Choice

Last week, Danielle purchased 200 shares of High Tech Heaven, Inc on margin for $50 per share. This week, the price High Tech Heaven's shares dropped by $10 per share due to a poor profit outlook. Danielle should anticipate:

• A)A stabilization of the stock price and graduate increase.
• B)A margin call from her broker.
• C)An offer by the broker to cover the short-fall with additional funding.
• D)A suggestion by the broker that she participate in a "short sale".

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Definitions:

Short-run

A time period in economics during which at least one input, such as factory size or capital, is fixed, and firms can adjust production levels only by changing variable inputs like labor.

Inflation

The growth rate of general prices for goods and services, which sequentially leads to a reduction in the ability to make purchases.

Unemployment

The situation when individuals who are capable of working and are actively seeking work are unable to find employment.

Marginal

Pertaining to small changes or differences in a firm's output or in the amount of a product consumed, often related to decisions about whether to increase or reduce production or consumption.