SIE practice questioneasyTypes of Accounts - Cash vs. Margin
An investor who wishes to avoid borrowing funds and only pay for securities in full should open which type of account?
- ACash account✓ Correct answer
- BMargin account
- COptions account
- DRetirement account
Explanation
Why A — Cash account
A cash account requires full payment of securities purchased and does not permit borrowing. Margin accounts allow borrowing, options accounts are specialized for derivatives trading, and retirement accounts are for tax-advantaged long-term savings.
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