Business and Personal Finance Dictionary

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• BUYING ON MARGIN
  
  When an investor borrows money from a broker to buy a security. You can borrow up to 50% of the purchase price. If the value of the stock goes up, you earn all the gains on the investment, even though you borrowed half of the initial investment. Of course, you need to pay back the borrowed amount to the brokerage, which charges interest for the amount you have borrowed. If the value of the stock falls, you will owe the brokerage for the losses.
  
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