Define Control Systems and Mention the Three Characteristics of an Effective

question 31

Essay

Define control systems and mention the three characteristics of an effective control system.

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Definitions:

Maintenance Margin

The minimum amount of capital that must be maintained in a margin account after a purchase or trade, to cover the risk of loss.

Margin Call

A requirement from a broker for an investor to add more cash or securities to their account to mitigate potential losses.

Short 100 Shares

The action of borrowing 100 shares of a stock to sell them with the expectation of buying them back later at a lower price.

Margin Call

A request from a broker to an investor to add more funds or securities to compensate for potential losses.