Margin trading allows investors to magnify the returns earned on their investments.This means that if a stock that is purchased on margin experiences a price increase of 15 percent,the investor actually receives a return greater than 15 percent,even if no dividends are paid,and vice versa.

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This statement is true. Margin trading involves borrowing funds from a broker to purchase securities, using the securities as collateral. By doing so, investors can amplify the gains (or losses) on their investments. However, it is important to note that margin trading also carries significant risks, as losses can accumulate quickly if the value of the securities purchased declines.

Margin Trading Allows Investors to Magnify the Returns Earned on Their