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1) the difference between the net sales price of an item or security and its cost. this is often called a profit margin and is frequently expressed as a percentage. for example, if you pay 50 cents for a pencil and sell it for a dollar, your profit margin is 50%. 2) the difference between the face value of a loan and the market value of the collateral that secures it. 3) an investor’s equity in securities purchased on credit through a broker. 4) cash or collateral that must be deposited with a broker who agrees to finance the purchase of securities.

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