Question

question 12 (1 point)
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what does margin mean?

1. the change in the broker loan resulting from a change in market price.
2. the total value of the transaction.
3. the amount of cash that the investor must have in her account in order to buy on margin.
4. the amount of credit loaned by the broker to buy on margin.

Explanation:

In finance (a sub - field of Business), when buying on margin, the margin is the amount of cash an investor must have in their account. Option 1 is about the change in a broker - loan (not the margin definition). Option 2 is the transaction value. Option 4 is the broker - loan amount (not the margin).

Answer:

1. The amount of cash that the investor must have in her account in order to buy on margin.