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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.

I agree

You are correct! The answer is C. When an individual buys stock on margin, it means they are borrowing money from their broker to purchase the stock. In this scenario, if the stock price rises, the investor is still responsible for paying interest on the borrowed funds. This interest is the cost of borrowing and is typically charged on a regular basis, such as monthly. Regardless of whether the stock price goes up or down, the investor must still pay the interest on the loaned funds.