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Which of the Following Is False

Question 78

Multiple Choice

Which of the following is false?


A) In a rising stock market, buying on the margin makes investment more profitable than it otherwise would be.
B) When an investor uses borrowed funds to purchase stock, the lender may put in a margin call that requires the investor to put up more funds at any time.
C) If the investor fails to meet a margin call, the stock is sold for the lender to recoup part or all of its losses.
D) The selling of the stock to recoup losses when a borrower fails to meet a margin call puts additional downward pressure on the flagging stock price.

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