Trading on Margin Can Magnify Losses or Profits

question 67

True/False

Trading on margin can magnify losses or profits.

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Definitions:

Agency Relationship

The legal arrangement where one party, the agent, acts on behalf of another, the principal, within the scope of authority granted by the principal.

Principal Had Dealt

A legal principle indicating acts or decisions made by an agent are legally binding on the principle if the agent acts within their authority.

Agent's Functioning

The actions carried out by an agent on behalf of a principal in the course of their agency relationship.

Fiduciary Duty

A legal obligation of one party to act in the best interest of another when in a position of trust, such as between a trustee and the beneficiaries.