What Is the Maximum Loss You Can Incur If You

question 92

Multiple Choice

What is the maximum loss you can incur if you have a long position on a stock in a cash account?

• A)The initial investment
• B)The initial margin
• C)The margin loan plus interest
• D)Zero
• E)Unlimited

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Definitions:

Compaction

Process by which soil, sediment, and volcanic materials lose pore space in response to the weight of overlying material.

Cementation

The precipitation of a binding material (the cement) around grains in sedimentary rocks.

Rock Types

Rock types are classifications of rocks based on their genesis, including three main categories: igneous, sedimentary, and metamorphic.

Conglomerate

A coarse-grained sedimentary rock composed of rounded fragments larger than 2 mm in diameter, embedded in a matrix of finer particles and cemented together.