Economy, asked by ydkumbharkar2115, 10 months ago

Difference between marginal requirement and collateral security

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Answered by liza10987654321
0

The securities serve as collateral for the loan. This difference has to stay above a minimum margin requirement, the purpose of which is to protect the broker against a fall in the value of the securities to the point that the investor can no longer cover the loan. In the 1920s, margin requirements were loose.

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