Asked by Dawson Lewis on Apr 28, 2024
Verified
Brokers' calls
A) are funds used by individuals who wish to buy stocks on margin.
B) are funds borrowed by the broker from the bank, with the agreement to repay the bank immediately if requested to do so.
C) carry a rate that is usually about one percentage point lower than the rate on U.S. T-bills.
D) are funds used by individuals who wish to buy stocks on margin and are funds borrowed by the broker from the bank, with the agreement to repay the bank immediately if requested to do so.
E) are funds used by individuals who wish to buy stocks on margin and carry a rate that is usually about one percentage point lower than the rate on U.S. T-bills.
Brokers' Calls
Short-term loans for brokers to fund their clients' margin accounts, often callable on demand.
Stocks on Margin
Refers to buying stocks by borrowing a part of their purchase price from the brokerage firm.
Percentage Point
A percentage point is a unit for expressing differences in percentages, helping to clarify changes in percent values over time by denoting the absolute difference between them.
- Acquire knowledge of crucial interest rates in financial markets and their consequences.
Verified Answer
ZK
Zybrea KnightMay 04, 2024
Final Answer :
D
Explanation :
Brokers' calls refer to the funds borrowed by brokers from banks to lend to their clients for purchasing stocks on margin, with the condition of immediate repayment upon the bank's request. This option combines both the aspect of margin buying and the nature of the borrowing agreement between brokers and banks.
Learning Objectives
- Acquire knowledge of crucial interest rates in financial markets and their consequences.