The Minimum Equity That Must Be Maintained at All Times

question 90

Multiple Choice

The minimum equity that must be maintained at all times in a margin account is called the:

• A)initial margin.
• B)initial equity position.
• C)maintenance margin.
• D)call requirement.
• E)margin call.

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Definitions:

Market Risk Premium

The excess return that investors require for choosing to invest in the stock market over a risk-free asset.

Index Fund

A type of mutual fund or exchange-traded fund (ETF) designed to follow the returns of a specific market index.

Treasury Bills

Short-term government securities with maturity periods of one year or less, sold at a discount from their face value.

Rate of Return

The percentage of profit or loss on an investment over a specific period, expressing the gain or loss relative to the investment's initial cost.