Buying Stock on Margin Allows an Investor to Borrow Funds

question 89

Multiple Choice

Buying stock on margin allows an investor to borrow funds from the brokerage company as part of the transaction. This ________ the potential return to the investor and ________ the risk.

• A) increases; increases
• B) increases; decreases
• C) decreases; increases
• D) decreases; decreases

---

Definitions:

Altitude

The height of an object or point in relation to sea level or ground level.

Latitude

A geographic coordinate that specifies the north-south position of a point on the Earth's surface.

Tropical Rain Forest

A dense, warm, wet forest biome located near the equator, known for its biodiversity and role in the global climate.

Nutrient Poor

Describes environments or substances that lack sufficient nutrients to support healthy plant or animal growth.