What Is the Purpose of a Margin Call

question 3

Multiple Choice

What is the purpose of a margin call?

• A) to inform you that your margin loan is due and payable
• B) to demand funds to increase your margin position
• C) to let you know the amount of funds that are now available for you to borrow
• D) to advise you that the interest rate on your loan has changed
• E) to remind you of the upcoming monthly payment due on your margin loan

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Definitions:

Primacy Effect

The tendency to remember information at the beginning of a list better than information that comes later.

Serial Position Effect

A cognitive phenomenon whereby items at the beginning and end of a list are more easily remembered than those in the middle.

Encoding Specificity Effect

The principle stating that the recall of information is higher if the cues present at the time of encoding are also present at the time of retrieval.

TOT Effect

Refers to the "Tip of the Tongue" phenomenon where a person cannot recall a specific word or term but has a partial recall or feels that the recall is imminent.