Which one of the following statements is true?
A) When buying stock on margin, an investor borrows stock from the brokerage firm.
B) Usually, a bank arranges for the loan in a margin transaction.
C) Investors buy on margin because doing so offers them the potential for greater profits.
D) The margin requirement is established by the New York Stock Exchange.
E) The current margin requirement is 25 percent.

Question

Quizplus · Accepted Answer

Investors buy on margin to leverage their investment, which can lead to greater profits if the stock price increases.

Which One of the Following Statements Is True