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Margin trading mitigates risk. True or False The risk free rate of return considers the expected...

Margin trading mitigates risk. True or False

The risk free rate of return considers the expected rate of inflation. True or False

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Answer #1

Margin trading mitigates risk.- False

"Margin trading is the act of raising funds from a broker for the purpose of investing in financial securities. The purchased stock serves as collateral for the loan. The main reason behind borrowing money is to get more capital to invest and, by extension, the potential to earn more profits."

The risk free rate of return considers the expected rate of inflation- True

"The risk-free rate of return considers the expected rate of inflation. Actions by the Federal Reserve can keep the risk-free rate below the rate of inflation"

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