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Securities and Exchange Commission (SEC)This answer is wrong.
The correct answer is below.
The Federal Reserve Bank of New York sets the margin rates or in other words the percentage of money that can be borrowed from a securities dealer when buying stocks on margin. As example, the NY Federal Reserve Bank may allow customers of a securities firms to put up only 50% of the cost of a stock purchase.
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What is the definition of a margin loan?
The definition of a margin loan in it's simplest term would be a loan which is taken out to finance the purchasing of equity , usually in the form of some sort of stock. The loan is normally requested and agreed by the same stock broker that the customer is using to trade with the equity they wish to purchase from.
Is buying stock on margin the same as options?
No. An option is the legal right to buy stock at some time in the future at a pre-arranged price. You can buy a stock option, but it doesn't entitle you to the actual stock until you exercise the option. Buying on margin means that you're currently purchasing the actual shares, but you're borrowing part of the money you're using to do so from your broker.
Why was stock bought on margin considered a risky investment?
Why was stock bought on margin considered a risky investment
What does the stock market vs inflation chart reveal about the relationship between stock market performance and inflation rates?
The stock market vs inflation chart shows that there is a relationship between stock market performance and inflation rates. Generally, when inflation rates are high, stock market performance tends to be lower, and vice versa. This is because high inflation erodes the purchasing power of money, leading to lower real returns on investments in the stock market.
What was the practice of purchasing stocks with loans from stockbrokers called?
The practice of purchasing stocks with loans from stockbrokers is called "margin buying" or "buying on margin." This allows investors to borrow money to buy more shares than they could with their own capital, amplifying potential gains. However, it also increases the risk of significant losses, especially if the stock prices decline, as investors may face margin calls requiring them to repay the loans.
What does buying on margin mean?
Buying on margin is borrowing money from a broker to purchase stock.
What does buying stockon margin mean?
Buying stock on margin means purchasing shares using borrowed funds from a brokerage, allowing an investor to leverage their investment. This involves putting down a percentage of the total cost (the margin) while the broker lends the rest. While this can amplify potential gains, it also increases the risk of significant losses, as investors may be required to repay the borrowed amount even if the stock value declines.
Stock rates of june302009?
stock rates of june30 2009
Buying stock on margin remained profitable as long as?
stock prices rose
Buying stock on margin remained profitable as long as .?
stock prices rose
How did buying on margin allow more people to invest in the stock market?
Buying on margin allowed more people to invest in the stock market by enabling them to borrow money to purchase stocks. With a margin account, investors could put down only a fraction of the total cost of the shares they wanted to buy, typically around 10%, and borrow the rest from a broker. This allowed individuals with limited capital to have greater purchasing power and participate in the stock market.
What does it mean to buy a stock on margin?
buying stock on margin is buying stock with money you dont have. in essence buying with credit. this is now illegal i believe as it was one of the culprits behind the great depression
