Margin Accounts - Series 7

20 Questions

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Account Quizzes & Trivia

Questions and Answers
  • 1. 
    Regulation T applies to which of the following? a. Municipal securities b. Securities listed on a registered stock exchange c. Securities listed on Nasdaq d. U.S. Treasury
    • A. 

      A,b &c

    • B. 

      A & c

    • C. 

      B & c

    • D. 

      A, b & d

  • 2. 
    The current initial margin requirement under Regulation T is:
    • A. 

      15%

    • B. 

      30%

    • C. 

      45%

    • D. 

      50%

  • 3. 
    The minimum maintenance requirement for a long term margin position is:
    • A. 

      30%

    • B. 

      25%

    • C. 

      20%

    • D. 

      10%

  • 4. 
    A customer's intiial purchase in a margin accoun is for stock worth $3,000. Under industry rules, how much would the customer be required to deposit?
    • A. 

      $1,500

    • B. 

      $2,000

    • C. 

      $2,500

    • D. 

      $3,000

  • 5. 
    All of the following factors are used for computation in a long margin account, EXCEPT the:
    • A. 

      Long market value

    • B. 

      Short market value

    • C. 

      Debit balance

    • D. 

      Equity

  • 6. 
    Excess equity is the amount by which the equity in the account is:
    • A. 

      Below the initial margin requirement

    • B. 

      Above the initial margin requirement

    • C. 

      Below the maintenance requirement

    • D. 

      Above the maintenance requirement

  • 7. 
    A customer sells short 100 shares of ELS at $50 per share. The credit balance in the customer's account after the customer deposits the required margin is:
    • A. 

      $10,000

    • B. 

      $7,500

    • C. 

      $5,000

    • D. 

      $2,500

  • 8. 
    A decrease in the value of the stock in a long position may cause the account to:
    • A. 

      Become restricted

    • B. 

      Fall below the Reg. T margin

    • C. 

      Both a and b

    • D. 

      Neither a or b

  • 9. 
    Excess equity in a short account is created when the stock:
    • A. 

      Increases in value

    • B. 

      Decreases in value

    • C. 

      Value remains the same

    • D. 

      None of the above

  • 10. 
    Municipal bonds have a margin requirement of what percentage of market value?
    • A. 

      5%

    • B. 

      10%

    • C. 

      30%

    • D. 

      None of the above

  • 11. 
    • A. 

      $14,000

    • B. 

      $150,000

    • C. 

      $240,000

    • D. 

      $320,000

  • 12. 
    Initial and maintenance requirements for U.S. government obligations are:
    • A. 

      1% for government securities with less than 1 year to maturity

    • B. 

      6% for government securities with 20 or more years to maturity

    • C. 

      Both a and b

    • D. 

      Neither a nor b

  • 13. 
    • A. 

      $28,000

    • B. 

      $15,000

    • C. 

      $13,000

    • D. 

      $12,000

  • 14. 
    Ms. Black sells short 1,000 shares of ABC at $20 generating proceeds of $20,000. What are her options in terms of meeting the Reg. T call? a. Deposit $10,000 in cash b. Deposit $15,000 in cash c. Deposit $10,000 worth of marginable securities d. Deposit $20,000 worth of marginable securities
    • A. 

      A and c

    • B. 

      A and d

    • C. 

      B and c

    • D. 

      B and d

  • 15. 
    Mr. Green's securities that were originally worth $20,000 decline in value to $16,000. He has a debit balance of $10,000. What effect does this have?
    • A. 

      Equity declines

    • B. 

      Equity increases

    • C. 

      Debt declines

    • D. 

      Debt increases

  • 16. 
    A customer's initial purchase in a margin account is for stock worth $1,800. What is the required initial deposit?
    • A. 

      $900

    • B. 

      $1,800

    • C. 

      $2,000

    • D. 

      $2,9000

  • 17. 
    A customer purchases 100 shares of stock at $50 in a new margin account. What is the required initial deposit?
    • A. 

      $2,000

    • B. 

      $2,500

    • C. 

      $4,000

    • D. 

      $5,000

  • 18. 
    • A. 

      $2,000

    • B. 

      $2,500

    • C. 

      $10,000

    • D. 

      $12,500

  • 19. 
    Mr. Smith purchases securities with a total market value of $20,000. If the securities go up in value to $24,000, what is the new loan value?
    • A. 

      $2,000

    • B. 

      $4,000

    • C. 

      $12,000

    • D. 

      $14,000

  • 20. 
    The extension of credit by a broker-dealer to a customer is regulated by the:
    • A. 

      Federal Reserve Board

    • B. 

      Securities and Exchange Commission

    • C. 

      Financial Industry Regulatory Authority

    • D. 

      Municipal Securities Rulemaking Board