An Investor Receives a Margin Call Because

question 46

Multiple Choice

An investor receives a margin call because

• A) the value of the stock that was sold short has decreased below a price specified by the broker.
• B) the brokerage firm wants to provide her with information about a new public stock issue that it will be handling in the future.
• C) interest rates in the financial markets have increased substantially,and the brokerage firm wants her to immediately repay the loan she has outstanding.
• D) the Federal Reserve intends to sell a special issue of Treasury securities and it needs investors to subscribe to the issue as quickly as possible.
• E) the price of the stock she purchased on margin has decreased enough so that the actual margin is below the maintenance margin.

---

Definitions:

Resistance

The opposition to flow or movement, often encountered in physics, physiology, and various types of materials.

Thoroughfare Channels

Specialized vascular passages in the microcirculation, enabling blood flow from arterioles to venules and bypassing capillary beds.

Fenestrae

Small openings or pores in the endothelial cells of capillaries that allow for the exchange of substances between blood vessels and tissues.

Capillary Beds

Networks of capillaries functioning together to exchange gases, nutrients, and wastes between blood and tissues.