Canadian Securities Course (CSC) Level 1 Practice Exam

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What securities are available for reduced margin?

  1. Low liquidity and high price volatility stocks

  2. High liquidity and low price volatility stocks

  3. Risky and illiquid securities

  4. Securities with potential for high gains

The correct answer is: High liquidity and low price volatility stocks

Securities that are available for reduced margin are often low-risk securities with high liquidity and low price volatility. This is because these types of securities are considered safer for trading on margin, as they are less likely to experience significant price fluctuations that could result in margin calls. In contrast, options A, C, and D involve higher levels of risk and volatility, which would not typically qualify them for reduced margin arrangements.

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