Where the value of secured assets falls below an agreed debt-to-asset ratio for a margin loan, what action will be required to be taken?

Question

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When the value of secured assets falls below an agreed debt-to-asset ratio for a margin loan, the borrower must meet a margin call on the loan, which means they must either provide more collateral or pay down the loan balance. If the borrower fails to meet the margin call, the lender may have the right to sell the securities in the account to repay the loan.

Where the Value of Secured Assets Falls Below an Agreed