If You Ignore a Margin Call, Your Broker

question 68

Multiple Choice

If you ignore a margin call, your broker:

• A)will seize all the assets in your account.
• B)will close your account.
• C)may place a short sale on your behalf to cover the amount of the call.
• D)may sell some of your securities to repay the margin loan.
• E)will increase both your margin loan and the rate of interest on that loan.

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Definitions:

Appraisal Rights

The rights of a corporation's minority shareholders to have a judicial assessment of the fairness of a proposed transaction, typically a merger or acquisition.

Parent's Minority Shareholders

Individuals or entities that hold a smaller, non-controlling percentage of shares in the parent company.

Going Private Transaction

A process in which a publicly traded company is transformed into a privately held entity, usually by a buyout.

Cash-Out Contributions

Monetary contributions made to withdraw from an investment or retirement account, often incurring penalties or taxes.