During an Economic Expansion, We Would Expect

question 47

Multiple Choice

During an economic expansion, we would expect:

• A) interest rates to increase.
• B) interest rates to decrease.
• C) interest rates to remain the same.
• D) the price of money to decrease.

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Definitions:

Maintenance-Margin

The minimum amount of equity that must be maintained in a margin account to continue holding positions, preventing a margin call.

Margin Call

A demand by a broker that an investor deposits further cash or securities to cover possible losses.

Margin Deposit

A margin deposit is an initial sum deposited to cover potential losses when borrowing capital for investing, typically in a margin account for trading securities.

Open Interest

The number of futures contracts outstanding.