ZuoTi.Pro
Question

Question: What is the difference between a cash account and a margin (or cash-margin) account? Answer...

Question: What is the difference between a cash account and a margin (or cash-margin) account?

Answer (True/False): A cash and margin account (or simply a margin account) allows the account holder to have an option (but not an obligation) to borrow money from the broker to buy securities. Owners of a cash account don't have such an option.

business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

First we need to understand what is Cash Account and What is Margin Account.

Cash Account: It is an account which is used for the purpose of buying selling of securities, or we can say that it is an brokerage or kind of demat account. But in this type of account investor can not take margin benefits it means he can not buy securities on margin or can not borrow money or take loan from the broker to buy securities.

Margin Account: Unlike Cash Account in Margin account investor has opportunity to buy shares on margin, or the investor can borrow money or take loan from the broker for investing in the security.

Thus the correct Answer is True.

0 0
Add a comment
Know the answer?
Add Answer to:
Question: What is the difference between a cash account and a margin (or cash-margin) account? Answer...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • What is the difference between cash and accrual accounting? What is the debit and credit for...

    What is the difference between cash and accrual accounting? What is the debit and credit for each of the following items? Issue $10,000 equity Buy $1,000 of inventory Borrow $15,000 from bank

  • Question 2 What is the difference between equity and liability options? Equity options can be settled...

    Question 2 What is the difference between equity and liability options? Equity options can be settled for intrinsic value. Equity options increase reported Owners' Equity. Equity options can be used to purchase shares of stock. Equity options can only be used to purchase shares at a set price. Question 3 What effect would antidilutive securities have on EPS if they were exercised? Antidilutive securities don't effect EPS. Antidilutive securities reduce EPS. Antidilutive securities increase EPS. Antidilutive securities can increase or...

  • QUESTION 4 True or False: The difference between commodity money and fiat money is that one...

    QUESTION 4 True or False: The difference between commodity money and fiat money is that one has inherent value and the other is money that is used to buy an Italian car. True False QUESTION 5 People hold currency for three reasons, one of which is the transactions motive (ie, the need to conduct a transaction using currency). Of the following, which would have the smallest transactions motive? A drug dealer A gambling bookie The purchasing department of IRSC A...

  • You deposit $100,000 cash in a brokerage account and purchase $200,000 of stocks on margin by...

    You deposit $100,000 cash in a brokerage account and purchase $200,000 of stocks on margin by borrowing $100,000 from your broker. Later, the value of your stock holdings falls to $175,000. What is your account margin in dollars?

  • A. Ms. Simwami has K40 000 in her margin account and she wants to use the...

    A. Ms. Simwami has K40 000 in her margin account and she wants to use the money to buy shares of the ABC company. The initial margin requirement is 40% and ABC's stock price is currently k50. Ignore taxes, commissions and interest on the amount borrowed. If the maintenance margin is 30%, at what price would she receive a margin call from her broker? [8 Marks]

  • D Question 6 1.5 pts A margin call is made when an account falls below the...

    D Question 6 1.5 pts A margin call is made when an account falls below the initial margin, but not below the maintenance margin. True False D Question 7 1.5 pts An inter-commodity spread is a spread between two different, but related commodities. True False D Question 8 1.5 pts Leverage is defined as the ratio between the maintenance margin and the initial margin. True False

  • timed assignmen i have 1 hour x + npt=18542Bcomid=32833 What is the difference between ROE and...

    timed assignmen i have 1 hour x + npt=18542Bcomid=32833 What is the difference between ROE and EPS? Question 1 Not yet answered Marked out of 5.00 P Flag question Select one: a. ROE IS Return on Equity, a financial ratio given by Net Profit divided by Total Equity, while EPS is Earnings Per Share, a financial ratio given by Net Profit divided by the Stock Price b. ROE is Return on Equity, a financial ratio given by Net Profit divided...

  • QUESTION 1 What is the difference between equity and liability options? Equity options can be settled...

    QUESTION 1 What is the difference between equity and liability options? Equity options can be settled for intrinsic value. Equity options increase reported Owners' Equity. Equity options can be used to purchase shares of stock. Equity options can only be used to purchase shares at a set price. QUESTION 2 What effect would antidilutive securities have on EPS if they were exercised? Antidilutive securities don't effect EPS. O Antidilutive securities reduce EPS. Antidilutive securities increase EPS. Antidilutive securities can increase...

  • this a question for the myob accounting software. - what is the difference between the spend...

    this a question for the myob accounting software. - what is the difference between the spend money function and general journal function? do i record wages expense, fuel expense, bank fees, advertising under general journal or spend money? all paid with cash using the cheque account.

  • QUESTION 4 A study seeks to determine if the mean difference between weekly grocery expenses this...

    QUESTION 4 A study seeks to determine if the mean difference between weekly grocery expenses this year and five years o grocery expenses were recorded five years ago and this year Below is the SPSS output corresponding to the Paired Samples Statistics to. A sample of adults participated in a five-year follow up ad Their weekly 153 9091 149 412 55 55 St Denton 456343 541155 Paired Sample Par preces 15 Comidence of Wan Sid Deviation SIE an The following...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT