Increased margin buying forecasts _____ stock levels and low cash positions of mutual funds might indicate _____ stock price levels.
A) higher; higher
B) higher; lower
C) lower; lower
D) lower; higher

Question

Quizplus · Accepted Answer

Increased margin buying typically forecasts higher stock levels because it indicates that investors are borrowing money to buy more stocks, showing optimism about the market. Low cash positions in mutual funds might indicate lower stock price levels because it suggests that mutual funds have already invested a large portion of their assets, leaving less cash available to support or push up stock prices further.

Increased Margin Buying Forecasts _____ Stock Levels and Low Cash