If you have a margin account and your broker requires 40% initial margin, this means:

		you can borrow no more than 40% of the purchase price of the stock from your broker.
		you can borrow no more than 60% of the purchase price of the stock from your broker.

In Bagehots The Only Game in Town there are three types of market participants: (1) liquidity traders; (2) noise traders; and:

		day traders
		derivative speculators
		SEC regulators
		informed traders

In a capitalist system, financial markets play a central role in the allocation of capital resources. That is to say, prices serve as signals and help organize society.

		true
		false

Say you buy 87 shares of GS for $164 per share on 70% initial margin. The maintenance margin is 30%.

What is the highest stock price at which you would receive a margin call?

		$65.28
		$70.29
		$82.00
		$99.58

When you short sell a stock you are:

		buying the stock and waiting for the stock to decline before selling it.
		buying the stock and simultaneously placing a limit sell order to attempt to lock in a profit.
		borrowing the stock from your broker and selling it with the obligation to return the stock to your broker in the future.