FINRA Series 7

Category - Series 7

Bubba’s margin account has $2,000 of SMA. If he buys $10,000 of new securities, how much additional cash must he deposit assuming a Reg T requirement of 50%?
  1. $3,000
  2. $4,800
  3. $5,000
  4. $6,000
Explanation
Answer: A - $3,000. The purchase requires $5,000 ($10,000 x 50%). Since the existing SMA is $2,000 Bubba only needs to deposit the remaining $3,000.
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