In margin buying you borrow shares to sell now and buy back the shares later and return those. True or False

Question

Business

Mariela Perkins

13 January, 09:24

In margin buying you borrow shares to sell now and buy back the shares later and return those. True or False

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Answers (1)

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Marcus Arias · Answer 1

False

Explanation:

When you buy on margin you are borrowing money from your broker in order to purchase securities. The advantage of buying on margin is that you can purchasing a larger amount of stocks, but that also increases the risk of your investment as well as the potential returns.