If Toni, Who Is Only Six Years Old, Is Asked

question 51

Multiple Choice

If Toni, who is only six years old, is asked what she would get if she added 5 and 10 together, which of the following processes would she most likely use?

• A) ​She would break the ten down into two fives and then add five together three times.
• B) ​She would start with five and add ten by increasing the sum, one number at a time (e.g., "five, six, seven, eight…").
• C) ​She would already have memorized that the sum is 15, so she would simply retrieve it form memory rather than calculating the answer.
• D) ​She would start with ten, and add five by increasing the sum one number at a time (e.g., "ten, eleven, twelve…").

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Definitions:

Leverage

The use of borrowed money to increase the potential return of an investment, which can also magnify the potential loss.

Margin

The difference between the selling price of a product or service and its cost, or the borrowed funds used to invest in securities.

Margin Call

A demand by a broker that an investor deposits further cash or securities to cover possible losses.

Initial Margin

The initial margin is the upfront investment required when buying on margin or entering a futures contract, acting as a security deposit for the trade.