Which One of the Following Statements About Margin Trading Is

question 98

Multiple Choice

Which one of the following statements about margin trading is correct?

• A) The Securities Exchange Commission sets the minimum margin requirement for margin trading.
• B) If Fred buys $1,000 worth of stock using 60% margin, he will need to pay $600 in cash to make the purchase.
• C) Margin traders are willing to accept lower return to reduce their risk.
• D) Margin traders are pessimistic about the future price of the stock.

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Definitions:

Procedural Safeguards

Policies and procedures designed to protect individuals’ rights and ensure fair treatment within a system or process.

Role Reversal

involves switching roles within interactions to gain insight or empathy towards another's perspective, often used as a technique in therapy or conflict resolution.

Escalating Reciprocation

A process where two or more parties increase their commitments or responses based on the actions of the other, often leading to an escalation in conflict or competition.

Interpersonal Tension

A state of psychological strain or stress occurring between individuals due to conflicts or disagreements.