Margin rate refers to the percentage of the total cost of a product or service that is added on top of the production cost to determine the final selling price. This rate is typically used in business and finance to calculate the profit margin of a company or to determine the minimum amount of profit needed to cover expenses. A higher margin rate indicates a larger profit margin, while a lower margin rate may result in a smaller profit margin. Margin rate can also refer to the amount of collateral required for a margin account, which allows investors to borrow money to purchase securities. In this context, a higher margin rate means a lower borrowing capacity, while a lower margin rate allows for a higher borrowing capacity. Overall, margin rate plays a crucial role in determining the profitability and financial stability of a business or investment.