The Minimum Equity That Must Be Maintained at All Times

question 90

Multiple Choice

The minimum equity that must be maintained at all times in a margin account is called the:

• A)initial margin.
• B)initial equity position.
• C)maintenance margin.
• D)call requirement.
• E)margin call.

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Definitions:

Equity Funds

Mutual funds that invest primarily in stocks, aiming for growth by capital gains rather than income from dividends or interest.

Bond Funds

Investment funds that exclusively invest in bonds, offering investors exposure to the fixed income market.

Mutual Fund Assets

The total value of all the securities and cash held by a mutual fund, representing the fund's overall portfolio size.

Leverage

The use of borrowed funds to increase the potential return of an investment, also amplifying the potential risk of loss.