The interest rate charged on margin accounts is determined by:
A) adding a percentage to the broker call rate.
B) adding a percentage to the margin interest rate.
C) subtracting a percentage from the broker call rate.
D) subtracting a percentage from the margin interest rate.

Question

Quizplus · Accepted Answer

The interest rate on margin accounts is typically determined by adding a percentage to the broker call rate, which is the interest rate banks charge brokers for funds used to finance margin loans to investors.

The Interest Rate Charged on Margin Accounts Is Determined By