Question

Brokers' calls:________

a. are funds used by individuals who wish to buy stocks on margin.
b. are funds borrowed by the broker from the bank, with the agreement to repay the bank immediately if requested to do so.
c. carry a rate that is usually about one percentage point lower than the rate on U.S. T-bills.
d. are funds used by individuals who wish to buy stocks on margin and are funds borrowed by the broker from the bank, with the agreement to repay the bank immediately if requested to do so.
e. are funds used by individuals who wish to buy stocks on margin and carry a rate that is usually about one percentage point lower than the rate on U.S. T-bills.

Answer 1

D.

Step-by-step explanation:

A brokers' call can be defined as the interest rate that banks charge on loans given to brokerage firms. It is also known as call loan rates. The brokers use this loan to fund their traders' margin account.

The statements correct about brokers' calls from the given options is D. The broker's calls are funds used by both individuals and broker from the bank. Individuals use this loan to buy stocks whereas brokers borrow with an agreement to repay immediately.

Therefore, option D is correct.