February 26, 2017

Homework Help: Financial Management 2-2

Posted by Johnny on Saturday, February 21, 2009 at 11:50pm.

If an individual buys stock on margin and its price rises,
the investor
A. must put up additional collateral.
B. must pay tax on the unrealized gain.
C. must pay interest on the borrowed funds.
D. may take delivery of the stock.

I would think the answer is C, because if you lose or gain, you still have to pay interest on the borrowed funds.

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