The minimum amount of the purchase price of certain stock transactions that must be paid in cash is called the
A) down payment.
B) reserve requirement.
C) collateral.
D) margin.
E) line of credit.

Question

Quizplus · Accepted Answer

The minimum amount of the purchase price of certain stock transactions that must be paid in cash is called the margin. It is a percentage of the total purchase price that the investor is required to put up in cash. This is to ensure that the investor has some skin in the game and is not over-leveraged in their investment. A down payment, reserve requirement, collateral, and line of credit are all related to financing and borrowing, but not specifically to stock transactions.

The Minimum Amount of the Purchase Price of Certain Stock