The Difference Between a Cash Account and a Margin Account

Multiple Choice

The difference between a cash account and a margin account is:

A) a margin account allows the investor up to five days to pay for the entire purchase.
B) a cash account gives the investor a 2% discount if they pay within 10 days, or the investor has to pay the entire amount within 30 days (2/10 net 30) .
C) a margin account allows the investor to borrow a percentage of the purchase price from the brokerage firm.
D) a margin account is less risky to the investor.
E) a cash account requires the stock be kept registered in street name, and a margin account allows the securities to be delivered to the customer.