A ____________ Requires Full Payment for the Purchase of Securities

question 2

Multiple Choice

A ____________ requires full payment for the purchase of securities while a _____________ allows the investor to borrow a portion of the purchase price from the brokerage firm.

• A)Money market account; cash account
• B)Cash account; charge account
• C)Cash account; margin account
• D)Type 5 account; a type 2 account

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Definitions:

Operating Leverage

Operating leverage is a measure of how revenue growth translates into growth in operating income, indicating the degree to which a firm can increase operating income by increasing revenue.

Degree of Operating Leverage

A financial ratio that measures how a change in sales volume will affect a company's operating income due to fixed and variable costs.

Temporary Workers

Employees hired for a specific period or to complete a specific task, often without the promise of long-term employment.

Financial Basis

In accounting, the underlying value or cost of an asset or investment used for tax reporting and calculating gains or losses.