What Is the Purpose of a Margin Account and Using

question 257

Multiple Choice

What is the purpose of a margin account and using margin to purchase stocks?

• A)A margin account allows you to purchase stocks without using any of your own money.
• B)A margin account allows you to purchase more shares than you could afford to purchase using only your own money.
• C)Using margin to purchase more shares gives you the potential to earn a higher return on your investment.
• D)All of the above are correct.
• E)Only B and C are correct.

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Definitions:

ITQs

Individual Transferable Quotas, a fishery management tool that allocates a certain quantity of a fishery resource to individuals or companies.

Pacific Halibut

A large flatfish species found in the North Pacific Ocean, prized for its commercial and recreational fishing value.

Market Price

The current price at which an asset or service can be bought or sold in a given market.

Conflict Diamonds

Diamonds that are mined and sold by combatants in war zones in Africa as a way to provide the currency needed to finance their military activities.