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Types of Margin Accounts: Requirements & Characteristics

Instructions:

Choose an answer and hit 'next'. You will receive your score and answers at the end.

question 1 of 3

A margin account is a type of brokerage account, in which the broker extends a line of _____ the investor can use to purchase securities.

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1. Why is trading on margin so risky?

2. Which of these is a typical security an investor would hold in a portfolio margin account?

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About This Quiz & Worksheet

Answering the questions in this quiz will help you see what you can remember about the types of margin accounts. The questions ask you about risk, pattern-day trading, securities and phrases related to margin accounts.

Quiz & Worksheet Goals

Use your knowledge of the following topics to pass the quiz:

  • A term used when a margin account falls below a minimum
  • The definition of a margin account
  • Identifying an incorrect example of pattern-day trading
  • One common security type held in a portfolio margin account
  • The reason trading on margin is high-risk

Skills Practiced

With this tool you can practice:

  • Interpreting information - verify that you can read information regarding the definition of a margin account and interpret it correctly
  • Knowledge application - use your knowledge to answer questions about typical security types held in margin accounts
  • Information recall - access the knowledge you've gained regarding the risks associated with trading on a margin

Additional Learning

Do you want to review any areas you found difficult in this quiz? Then you can use Types of Margin Accounts: Requirements & Characteristics, the companion lesson that can help you learn more about:

  • Day trade margins and what they involve
  • Margin requirements for different types of margin
  • The commission that regulates margins
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