If the value of the borrower's collateral drops, a stockbroker can make a ________, requiring the borrower to provide more collateral for his margin loan.
A) broker's margin
B) margin call
C) broker's call
D) None of the above

Question

Quizplus · Accepted Answer

When the value of the borrower's collateral drops, the stockbroker can make a margin call, which requires the borrower to provide additional collateral for the margin loan. This is a common practice in the financial industry to protect lenders from potential losses due to market fluctuations. Option A, broker's margin, and option C, broker's call, are not terms used in this context.

If the Value of the Borrower's Collateral Drops, a Stockbroker