Financial

FINANCIAL MARKETS FINAL EXAM REVIEW. FINANCIAL MARKETS FINAL EXAM REVIEW CHAPTER 8 – Margin and short selling  Margin trading o Trading on margin (choosing right security is crucial to this strategy) o Brokers must approve margin purchases o Leverage: using borrowed funds to buy securities (stocks, bonds, etc.)  Relates to margin o Margin: % of the investor ́s equity  Investor makes a $1000 investment of which $750 is his and the remaining $2 are borrowed from his broker. ...