MARGIN ACCOUNT
A brokerage account in which the broker or dealer lends the customer cash in order to purchase securities. Unlike a cash account, an individual can buy securities by using the money he/she borrowed from the brokerage. The loan is collateralized by the securities and cash. The account holder will be required to deposit additional cash or sell a part of the security in the event the stock value drops. The Federal Reserve limits margin borrowing to 50% at most of the invested amount. Some brokerage firms have stricter requirements, especially for volatile stocks.
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Target Return
Pricing model used in valuing a business based on what an investor expects from any capital invested in the firm. It is computed by adding the amou ...
Remainder Man
An individual who receives the remaining principal in a trust account after all required payments have been made, such as those to the beneficiary ...
Average Collected Balance
The total average of the collected funds in a bank account in a month. The balance is calculated by adding the collected balance and dividing it by ...
Bankable Funds
Forms of payment that are accepted at financial institutions. Retailers and other organizations that directly accept payments from customers typica ...
Prudent-Person Rule
A legal maxim that restricts the discretion in a client's account to investments that a prudent person seeking reasonable income and preservati ...
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