单选题 Which of the following statements regarding financing bond purchases is TRUE? A. In margin transactions, the broker borrows from the bank at the call money rate plus a spread. B. The rate the investor pays on the loan in a margin transaction is known as the call money rate. C. Purchasing securities on margin allows investors to leverage assets and make larger purchases.

【正确答案】 C

【答案解析】In margin transactions, the broker borrows from the bank at the call money rate. The rate the investor pays on the loan in a margin transaction is known as the call money rate plus a spread. Remember that the broker needs to make profit, so the investor will pay a rate higher than the broker pays to the bank. The investor collateralizes the margin loan with the securities purchased.