A Margin Account

question 58

Multiple Choice

A margin account

• A) can be opened by any investor who wants to purchase securities by charging them to his/her credit card.
• B) allows an investor to borrow one hundred percent of the cost of the securities purchased.
• C) allows an investor to borrow a portion of the purchase price at a reasonable rate of interest.
• D) is permitted only in wrap accounts.

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Definitions:

Significant Influence

The power to participate in the financial and operating policy decisions of an investee but is not control or joint control over those policies.

Share Ownership

Refers to the possession of shares in a company, representing partial ownership and entitlement to a portion of the company's profits and assets.

Strategic Operating

Refers to decisions and activities related to the management of core business functions with the aim of achieving long-term objectives.

Board of Directors

The board of directors is a group of individuals elected to represent shareholders and oversee the activities and strategic direction of a company.