Multiple misses

A "margin account" is a type of brokerage account in which the broker-dealer lends the investor cash to purchase securities using marginable securities in the account as collateral. Which of the account documents authorizes the use of those securities as collateral for that loan? A) The credit agreement B) The secured agreement C) The loan consent agreement D) The hypothecation agreement

A) the credit agreement It is the credit agreement, sometimes referred to as the margin agreement, which authorizes the broker-dealer to use the value of the securities in the account as collateral for the margin loan to the client. The hypothecation agreement permits the broker-dealer to pledge the client's margin securities as collateral for a loan that the BD takes out. It is the credit agreement that, in addition to all of the other terms of the loan, contains the stipulation that the broker-dealer may use the client's margin securities as collateral for the loan that it makes to the client. In simple terms, there are two loans taking place: The loan from the BD to the client with the client's securities used as collateral. That is covered in the credit agreement The loan from a bank to the BD with the client's securities used as collateral for the BD's loan. The authorization for the BD to use those securities is found in the hypothecation agreement.

Which of the following investment analysis tools can be used most efficiently to predict the probability of outcomes of portfolio performance recognizing that variables such as holding periods and rates of return are generally uncertain? A) Technical analysis. B) Efficient market hypothesis. C) Fundamental analysis. D) Monte Carlo analysis.

D) Monte Carol Analysis Monte Carlo analysis uses simulations to predict the probability of portfolio performance in light of multiple and uncertain variable conditions. Technical analysis focuses on price patterns. Fundamental analysis focuses on economic, industry, and business conditions. The efficient market hypothesis argues that analysis itself has little, if any, value.

What is a margin account?

It allows an investor to purchase securities on Credit from the firm. use this to remember that it is set up under the credit agreement