Multiple Choice
Which one of the following statements about margin trading is correct?
A) The Federal Reserve sets the minimum margin requirement for margin trading.
B) If Fred buys $1,000 worth of stock using 60% margin, he will need to pay $400 in cash to make the purchase.
C) Purchasing stocks on margin is less risky than purchasing stocks by paying cash for the entire purchase.
D) Margin trading increases the potential profits while lowering the potential losses on a percentage basis.
Correct Answer:
Verified
Correct Answer:
Verified
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