What Is the Rationale for Different Margin Requirements on Different

question 22

Essay

What is the rationale for different margin requirements on different types of securities? (For example, 50 percent on common stock, and 30 percent on bonds)

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Definitions:

Economic Loss

Financial damage suffered by an individual or organization, often used in the context of litigation.

Federal Law

Laws created by the national government of a country which are applicable throughout the country, superseding state and local laws when conflicts arise.

Reverse Discrimination

describes situations where affirmative action policies or measures result in discrimination against members of a majority or historically advantaged group.

Affirmative Action

Policies and procedures designed to counteract historic discrimination against certain groups by providing them opportunities in education, employment, and other areas.