Brokers' calls
A) are funds used by individuals who wish to buy stocks on margin.
B) are funds borrowed by the broker from the bank, with the agreement to repay the bank immediately if requested to do so.
C) carry a rate that is usually about one percentage point lower than the rate on U.S. T-bills.
D) are funds used by individuals who wish to buy stocks on margin and are funds borrowed by the broker from the bank, with the agreement to repay the bank immediately if requested to do so.
E) are funds used by individuals who wish to buy stocks on margin and carry a rate that is usually about one percentage point lower than the rate on U.S. T-bills.

Question

Quizplus · Accepted Answer

Brokers' calls refer to the funds borrowed by brokers from banks to lend to their clients for purchasing stocks on margin, with the condition of immediate repayment upon the bank's request. This option combines both the aspect of margin buying and the nature of the borrowing agreement between brokers and banks.

Brokers' Calls