Which of the Following Is Not Correct

question 108

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 option is the right to buy or sell a stock at a predetermined price during a specified period of time.
• 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:

Power Factor

The ratio of the true power transmitted to a load to the apparent power in the circuit, indicating efficiency in electrical systems.

RLC Parallel Circuit

An electrical circuit consisting of a resistor (R), inductor (L), and capacitor (C) connected in parallel, affecting the circuit's impedance and frequency response.

Capacitive VARs

Reactive power generated or absorbed by capacitive elements in an AC circuit, contributing to the total power but not to work done.

Capacitive Current

The current that flows in a capacitor due to charging and discharging of its electric field, directly proportional to the rate of change of voltage across it.