Multiple Choice
Which method of funding higher education accrues interest until it is paid back?
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7. Receivables and Investments
Introduction to Investments in Securities
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What is a brokerage account primarily used for?
A
To obtain loans for purchasing real estate
B
To buy and sell securities such as stocks and bonds
C
To record company payroll transactions
D
To store physical cash for daily expenses
Verified step by step guidance1
Understand the concept of a brokerage account: A brokerage account is a financial account that allows individuals to buy and sell securities, such as stocks, bonds, mutual funds, and other investment products.
Differentiate the purpose of a brokerage account from other financial accounts: Unlike savings accounts or checking accounts, brokerage accounts are not primarily used for storing physical cash or daily expenses.
Clarify the role of a brokerage account in investment activities: Brokerage accounts are designed to facilitate investment transactions, enabling individuals to participate in the financial markets.
Eliminate incorrect options: A brokerage account is not used to record company payroll transactions or to obtain loans for purchasing real estate. These functions are typically handled by other specialized accounts or financial arrangements.
Conclude the primary use of a brokerage account: The main purpose of a brokerage account is to buy and sell securities, such as stocks and bonds, making it a key tool for investment and wealth management.
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