Which of the following types of accounts permits an investor to borrow money from a broker-dealer to help pay for a trade?
Cash
Margin
An individual retirement account (IRA)
Delivery versus payment (DVP) / receive versus payment (RVP)
Step by Step Explanation:
Margin Accounts: Allow investors to borrow funds to purchase securities, with the securities serving as collateral for the loan.
Cash Accounts: Require full payment for securities purchased.
IRAs: Do not permit borrowing due to their tax-advantaged status.
DVP/RVP: Settlement mechanisms, not account types for borrowing.
FINRA Rule 4210 (Margin Requirements): FINRA Rule 4210.
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