Which of the Following Is Not Correct

question 80

Multiple Choice

Which of the following is not correct?

• A) You pay interest on money borrowed to purchase stock on margin.
• B) Selling short is selling stock borrowed from a brokerage firm.
• C) A call option is the right, but not the obligation, to purchase a stock at a specified price by a given date.
• D) A brokerage firm receives double its commission when stock is bought and sold when the investor is selling short.
• E) If the stock price decreases and you purchased that stock on margin, you may receive a margin call.

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Definitions:

Service Charge

An additional fee charged for services rendered, often added to a bill in restaurants or for banking services.

Adjusted Cash Balance

The final amount of cash available in an account after all adjustments, including deposits, withdrawals, and any interest earned, have been accounted for.

Check Register

A record book or electronic document used to track checks written, deposits made, and current balances in a checking account.

Outstanding Check

A check that has been written and issued but not yet cashed or cleared by the bank.