What Does an Investor Have to Do When He or She

question 168

Multiple Choice

What does an investor have to do when he or she receives a margin call?

• A) Return all of the stock purchased with the borrowed funds.
• B) Give the brokerage firm all of the shares of stock purchased using the margin requirement.
• C) Return the borrowed funds in full along with fees and interest.
• D) Provide additional cash or securities as collateral for the borrowed money.
• E) Exchange the borrowed stock for one with greater growth potential.

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Definitions:

Lower-Order Needs

Lower-order needs are fundamental physiological and safety-related needs in Maslow's hierarchy, such as food, water, shelter, and security, considered essential for survival before higher-order needs can be addressed.

Abraham Maslow

An American psychologist known for creating Maslow's hierarchy of needs, a theory in psychology proposing that certain fundamental needs must be satisfied before higher needs can be pursued.

Drive Theories

Theories in psychology that explain motivation as being driven by biological needs that demand satisfaction.

Approach Theories

A set of theories in psychology that focus on the motivations driving individuals towards certain behaviors or goals.