What Additional Risk Is Involved When Buying Stock on Margin

question 32

Multiple Choice

What additional risk is involved when buying stock on margin?

• A)The interest rate charge
• B)The leverage
• C)A margin call
• D)The amount borrowed

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Definitions:

Retail Price

The price at which goods or services are sold to the end consumer.

Commission Rate

The percentage or fixed payment associated with a transaction or sale that is given to the intermediary or salesperson.

Commission Rate

The percentage of a sale price that is paid to the salesperson as a reward for making the sale or dealing.

Freight

Goods transported in bulk by truck, train, ship, or airplane.