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FINRA Series 7

Category - Series 7

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Bubba sells short 100 XYZ at $60 and makes the required Regulation T deposit of 50%. XYZ then rises I price to $65. At this point what is the credit balance?

$2,500
$3,500
$6,000
$9,000

Explanation

Answer: D - $9,000. Credit balances in short accounts do not change because of fluctuation in market prices. The initial deposit of $3,000 ($6,000 x 50%) plus the $6,000 from the short sale leave a credit balance of $9,000.

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