Which One of the Following Statements About Margin Trading Is

question 116

Multiple Choice

Which one of the following statements about margin trading is correct?

• A) The Federal Reserve sets the minimum margin requirement for margin trading.
• B) If Fred buys $1,000 worth of stock using 60% margin, he will need to pay $400 in cash to make the purchase.
• C) Purchasing stocks on margin is less risky than purchasing stocks by paying cash for the entire purchase.
• D) Margin trading increases the potential profits while lowering the potential losses on a percentage basis.

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Definitions:

Steroid Hormone

A type of hormone derived from cholesterol, including androgens, estrogens, glucocorticoids, and mineralocorticoids, that regulates various bodily functions.

Carbohydrate

Organic compounds consisting of carbon, hydrogen, and oxygen, serving as a major energy source for the body; includes sugars, starches, and fibers.

Protein

Large biomolecules, or macromolecules, consisting of one or more long chains of amino acid residues, vital for body structure and function.

Fat Metabolism

The biochemical process involving the breakdown, synthesis, and transformation of fats in the body for energy and cellular functions.