An investor wants to buy 100 shares of a company but due to shortage of funds investor can only 30% of the total share price and will borrow rest of 70% from brokerage firm. Which of the following type of account will be suitable for investor in this situation?

Question

Quizplus · Accepted Answer

Since the investor wants to borrow 70% of the total share price, a margin account is suitable for this situation as it allows investors to borrow funds from their brokerage firm. A cash account requires the investor to have the full amount of funds available to make the purchase. Real account and CFA account are not relevant to this situation.

An Investor Wants to Buy 100 Shares of a Company