首页
外语
计算机
考研
公务员
职业资格
财经
工程
司法
医学
专升本
自考
实用职业技能
登录
外语
Can you explain why people buy stock on margin?
Can you explain why people buy stock on margin?
admin
2010-02-11
115
问题
Can you explain why people buy stock on margin?
选项
答案
Suggested answers: a.Well, I don’t know much about stock market. As we all know, many people buy many things on credit, and stocks are no exception. Investors who qualify can make a stock purchase by paying 50 percent down and getting a loan for the remainder. This is called buying on a“margin”of 50 percent. The balance is borrowed at interest from the brokerage house and the stock certificates are deposited with the broker as security. The Federal Reserve Board regulates the minimum margins, the amount that must be paid in cash as a percentage of a purchase. The minimum margins vary, depending on whether there is need to stimulate the market or curb its speculative enthusiasm. b.If an investor sells stock held on margin that has appreciated, the investor may pocket the profit and pay the broker the amount that was borrowed plus interest and commission. If the stock goes down, the broker can issue a“margin call,”and the investor is required to pay an additional amount into the account. If the owner cannot produce cash, some of the stock is sold at the investor’s loss. Buying stock on margin gives speculators (traders willing to gamble on high-risk situations) the opportunity of making more profit and also the risk of suffering greater losses. c.At times the Federal Reserve Board requires a 100-percent margin, meaning that all stock must be paid for in cash. During the 1950s, for example, the margin rate varied from a low of 50 percent to a high of 90 percent. A low rate, of course, stimulates stock buying, while a high rate discourages it. The first concern of most investors is the safety of their purchases. If necessary they will often take lower dividends to avoid great risk. In contrast, speculators hope to see the price of their stocks go up, usually within months, or even days, They are more interested in the future of the stock than in its earning power at the time of purchase. People who believe they can outguess the market try to buy before prices rise and sell before they fall. d.There is also a group of speculators known as“short sellers. ”A short seller is someone who invests money because he or she expects a particular stock to go down in value. This person sells “borrowed”stock, in hope of replacing it later with stock bought on the open market at a lower price. This is one of the riskiest ways of investing in the market, because the price of a stock that is doing very well may rise tenfold or more, in which case the“short”gets“squeezed”for a big loss. Selling short is governed by specific rules to prevent abuses of a type that occurred in an earlier era on Wall Street. e.The largest security market in the world in terms of the number of different stocks and bonds traded is the over-the-counter (OTC) market. OTC is not located in any one place, but is primarily an electronic communications network of stock and bond dealers. The National Association of Securities Dealers, Inc. , which has the power to expel companies, supervises these stocks or dealers determined to be dishonest or insolvent. The over-the-counter market tends to get stocks of smaller companies, and by the 1990s had come to be known as a market where many of the fastest growing“high-tech-nology”stocks could be bought and sold. Again, information about trading activity can be acquired through newspapers, magazines, or electronically. A brokerage house usually handles purchases and sales of these stocks along with those on the major exchanges. f.Many persons who do not feel qualified to decide which stocks to purchase, but who nevertheless want to participate in the stock market in hopes of making a profit by doing so, turn to mutual funds. A mutual fund combines funds of its shareholders, which may be in small amounts, and invests large blocks of money in a varied portfolio of stocks, this reducing the risk, which is another reason why many people prefer this method of investing in stocks. g.Another advantage of mutual funds to the customer is that the fund’s managers get professional advise from staff analysts. It is possible for a fund to employ such persons because the operation is on a large scale. There are dozens of kinds of mutual funds. Some are designed for income. Some for capital appreciation, and others are speculative with the chance for large gains or severe losses. Some deal only with stocks of specific industries, or stocks of foreign companies, or companies whose activities benefit the environment. The number and variety of funds proliferated greatly in the 1980s; the total number of funds jumped from 524 to 2,918 over the decade, while the portion of U. S. households holding shares in mutual funds increased from 6 percent in 1979 to 25 percent in 1989.
解析
over-the-counter stocks场外交易股票。capital appreciation股本升值。brokerage经纪人佣金。 remainder余数,剩余部分。block冻结,封锁。
转载请注明原文地址:https://kaotiyun.com/show/82Od777K
本试题收录于:
BEC高级口语题库BEC商务英语分类
0
BEC高级口语
BEC商务英语
相关试题推荐
Whatisthemainpurposeofthereport?
A、 B、 C、 B听音时,抓住关键词“change”和“note”,推测题干跟换零钱有关,(B)“让我看看”是正确的回答。
A、 B、 C、 CHowabout…?是……怎么样的意思,这是一种在给对方提建议时常用的表达方法。这里问题提议明天见面,因此回答上午比较好的选项(C)是正确答案。(B)中Good一词是对对方提议表示答应的表达,但其后
A、 B、 C、 D、 BThegroupiswatchingamonitorwhileparticipatinginavideoconference.Choice(A)misiden
Whydoesthemanwanttopostponetheproject?
Task1StaffAppraisalSchemeThenewlyappointedHumanResourcesDirectorofthecompanyyouworkforisproposingtointroduce
Turningdownoffers—polite客气拒绝对方报价
Howdoesangelinvestmentdifferfrombankloans?
EffectiveBankingSupervisionEffectivesupervisionofbankingorganisationsisanessentialcomponentofastrongeconomic
随机试题
TURP综合征
临床上使用的基托材料主要为热凝和自凝基托材料两种,在组成,性能及应用上都不同自凝基托树脂与热凝基托树脂组成上的主要区别是A.牙托粉中是否含共聚粉B.牙托粉中是否含有机叔胺C.牙托水中是否含有机叔胺D.牙托水中是否含胶联剂E.牙托水中是否含阻聚
A.血清中检测出HBsAgB.血清中检出抗-HBsC.血清中检出HBeAgD.血清中检出抗-HBeE.血清中检出抗-HBc提示感染过乙肝病毒的是
女性,55岁,脑梗死病后第2天,意识不清,血压145/110mmHg,左侧偏瘫。颅内压为290mmH2O,首先应采取的治疗措施为
患者,女,20岁。结喉两侧弥漫性肿大,边界不清,皮色如常,无疼痛,诊为气瘿。治疗应首选
管理组织的目标来自()。
下列关于预应力混凝土施工技术的说法,正确的是()。
根据《企业会计制度》的规定,会计期间分为年度、半年度、季度和月度,所谓的会计中期指的是不足一年的会计期间,半年度、季度和月度都属于会计中期。()
当代中国行政决策的主要形式有()。
在一项关于求职人员的调查中,2/5的人承认至少有一些不诚实。然而,这项调查可能低估了有不诚实行为的求职人员的比例,因为______。以下哪一选择能最好地完成上面的短文?()
最新回复
(
0
)