Ask Question
BusinessBusiness
30 January, 11:22

Which best explains how currency traders can buy large amounts of a currency with little money up front?

+1
Answers (1)
  1. 30 January, 11:37
    0
    Group of answer choices:

    A) They sell shares in their enterprise to provide investment capital.

    B) They buy on margin to provide leverage for a large purchase.

    C) They purchase only currencies with a very low exchange rate.

    D) They use a bond issue to raise money for their trades.

    Answer:

    The correct answer is letter "B": They buy on margin to provide leverage for a large purchase.

    Explanation:

    Margin accounts allow traders to make transactions by leveraging the real amount of money they have in their accounts. Most brokers offer a leverage of 2:1 which implies individuals can trade twice the real amount of money they have but the ratio varies from broker to broker. Some offer 100:1 leverage ratios.

    In such a way, traders can enter in larger positions increasing their profit chances but their losses as well. If the trade does not go as expected, traders may end up owing even more money to what they had in their accounts.
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Which best explains how currency traders can buy large amounts of a currency with little money up front? ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
Sonya and other employees of TransGlobal Inc. maintain a password-protected social media page on which they post comments on work-related issues. The posts range from positive to negative, supporting the page's purpose to " vent about work.
Answers (1)
Which of the following statements is true about work hour regulations for 14 and 15-year-olds? They can work up to 30 hours during a school week They can only work outside school hours They can work up to 3 hours during school days They can start
Answers (1)
Olivia bakes cakes and Andrew grows corn. Olivia and Andrew both like to eat cake and eat corn. In which of the following cases is it impossible for both Olivia and Andrew to benefit from trade? a.
Answers (1)
Flagg records adjusting entries at its December 31 year-end. At December 31, employees had earned $12,400 of unpaid and unrecorded salaries. The next payday is January 3, at which time $31,000 will be paid.
Answers (1)
Blue Sky Company's 12/31/21 balance sheet reports assets of $7000000 and liabilities of $2800000. All of Blue Sky's assets' book values approximate their fair value, except for land, which has a fair value that is $420000 greater than its book value.
Answers (1)
New Questions in Business
If you purchased a camera in Britain for 100 pounds what would be the price in U. S. dollars if one pound is worth 1.40? A:71 B:100 C:140 D:1400
Answers (1)
Gontier corporation stock currently sells for $64.18 per share. the market requires a return of 12 percent on the firm's stock. required: if the company maintains a constant 5.
Answers (1)
If someone asked you, "Why should I bother worrying about my credit score?" what would you say?
Answers (1)
Hall and Donnell reported findings of five separate studies involving over 12,000 managers that explored the relationship between managerial achievement and attitudes toward subordinates.
Answers (1)
On September 1, 2021, Daylight Donuts signed a $188,000, 6%, six-month note payable with the amount borrowed plus accrued interest due six months later on March 1, 2022.
Answers (1)
Home » Business » Which best explains how currency traders can buy large amounts of a currency with little money up front?
Sign Up Forgot Password?