The amount by which the interest rate on your margin account exceeds your broker's call money rate is called the
A) Margin rate
B) Short rate
C) Spread
D) Overnight rate
E) Cash rate

Question

Quizplus · Accepted Answer

The spread is the difference or gap between the interest rate charged by the broker on the margin account and the call money rate or inter-bank lending rate. The margin rate is the interest rate charged by the broker on the borrowed funds, while the short rate refers to the interest rate charged for short selling. The overnight rate is the interest rate banks charge each other for overnight loans, and the cash rate refers to the interest rate on cash deposits.

The Amount by Which the Interest Rate on Your Margin