You are buying $10,000 worth of stock by putting up % 6,000 in cash and borrow the balance. This is an example of a transaction in a(n) ____ account.
A) Cash
B) Wrap
C) Short
D) Margin
E) Asset allocation

Question

Quizplus · Accepted Answer

In a margin account, an investor can borrow money from the broker-dealer to buy securities or borrow against securities already held in the account. In this scenario, the investor is putting up $6,000 in cash and borrowing the remaining $4,000 to purchase $10,000 worth of stock, which is an example of a transaction in a margin account.

You Are Buying $10,000 Worth of Stock by Putting Up