Which of the Following Describes a Margin Call

question 108

Multiple Choice

Which of the following describes a margin call?

• A) A broker forces a person in danger of running through their money to sell their stock and use the money to pay back their loan.
• B) A market reaches a tipping point, and policy-makers have to decide whether to intervene and prop up struggling financial institutions.
• C) Prices on future values of a stock are forecasted to be lower than current prices.
• D) Prices on future values of a stock are forecasted to be higher than current prices.

---

Definitions:

Expected Cash Collections

The projected amount of cash a company anticipates to receive from customers over a specific period.

Accounts Receivable

Funds due to a company from its clients for products or services rendered but still unpaid.

Ending Cash Balance

The amount of cash available in a company's account at the end of a financial period.

Selling

The process of promoting and transferring goods or services to customers in exchange for payment.