CUSTOMER ACCOUNT 1 UPDATED ACTUAL EXAM QUESTIONS CORRECT ANSWERS
GRADED A PLUS
Question:
What is the formula for equity in a Short Margin Account? A. + Credit - Short Market Value =
Equity B. + Credit + Short Market Value = Equity C. - Credit + Short Market Value = Equity D. -
Credit - Short Market Value = Equity.
Answer:
a
Question:
An investor has sold short stock worth $45,000 in a margin account, depositing the margin
requirement. If the market value of the stock falls to $30,000, what is the Selling Power in the
account? A. $7,500 B. $15,000 C. $22,500 D. $45,000.
Answer:
d sale) 45,000-45,000=0 margin) 22,500 + 67,500-45,000=37,500 67,500-30,000=37,500
30,000/2=15,000. 37,500-15,000=22,500 *2=45,000
Question:
A customer short margin account shows: 100 shares of ABC @ $45 300 shares of DEF @ $50
Credit = $45,000 SMA = $15,750 Reg. T = 50% What is the equity in the account? A. $5,850 B.
$9,750 C. $19,500 D. $25,500.
Answer:
d
Question:
Which statements are TRUE regarding SMA in a margin account that is at 50% margin? I Every
increase in market value in a long account results in a 50% increase in SMA II Every decrease in
market value in a long account results in a 50% increase in SMA III Every increase in market value
, in a short account results in a 150% increase in SMA IV Every decrease in market value in a short
account results in a 150% increase in SMA A. I and III B. I and IV C. II and III D. II and IV.
Answer:
a
Question:
As the initial transaction in a new short margin account, a customer sells 1,000 ABC @ $40 per
share. The stock then rises to $42. After the market rise, the customer's equity in the account is: A.
$2,000 B. $18,000 C. $20,000 D. $22,000.
Answer:
b sale) 40,000-40,000=0 mar.)20,000 cre.)60,000-40,000=20,000 new)60,000-42,000=18,000
Question:
A short margin account shows the following balances: Credit = $78,000 SMV = $50,000 At what
market value will the account be at the minimum maintenance margin level set by the
self-regulatory organizations? A. $60,000 B. $62,000 C. $65,000 D. $70,000.
Answer:
a 78,000-60,000=18,000=30% minimum maintenance margin level= 30%
Question:
In a new margin account, a customer sells short 100 shares of ABC at 80. What is the minimum
maintenance margin requirement? A. $2,000 B. $2,400 C. $4,000 D. $8,000.
Answer:
b minimum maintenance in a margin account is the greater of $2,000 or 30% of the SMV.
8,000*.30=2,400.
Question:
Short Positions: 100 ABC @ $60 200 XYZ @ $50 Credit = $40,000 SMA = $16,000 Reg. T = 50%
What is the minimum maintenance margin requirement? A. $4,000 B. $4,800 C. $7,200 D. $12,000.
GRADED A PLUS
Question:
What is the formula for equity in a Short Margin Account? A. + Credit - Short Market Value =
Equity B. + Credit + Short Market Value = Equity C. - Credit + Short Market Value = Equity D. -
Credit - Short Market Value = Equity.
Answer:
a
Question:
An investor has sold short stock worth $45,000 in a margin account, depositing the margin
requirement. If the market value of the stock falls to $30,000, what is the Selling Power in the
account? A. $7,500 B. $15,000 C. $22,500 D. $45,000.
Answer:
d sale) 45,000-45,000=0 margin) 22,500 + 67,500-45,000=37,500 67,500-30,000=37,500
30,000/2=15,000. 37,500-15,000=22,500 *2=45,000
Question:
A customer short margin account shows: 100 shares of ABC @ $45 300 shares of DEF @ $50
Credit = $45,000 SMA = $15,750 Reg. T = 50% What is the equity in the account? A. $5,850 B.
$9,750 C. $19,500 D. $25,500.
Answer:
d
Question:
Which statements are TRUE regarding SMA in a margin account that is at 50% margin? I Every
increase in market value in a long account results in a 50% increase in SMA II Every decrease in
market value in a long account results in a 50% increase in SMA III Every increase in market value
, in a short account results in a 150% increase in SMA IV Every decrease in market value in a short
account results in a 150% increase in SMA A. I and III B. I and IV C. II and III D. II and IV.
Answer:
a
Question:
As the initial transaction in a new short margin account, a customer sells 1,000 ABC @ $40 per
share. The stock then rises to $42. After the market rise, the customer's equity in the account is: A.
$2,000 B. $18,000 C. $20,000 D. $22,000.
Answer:
b sale) 40,000-40,000=0 mar.)20,000 cre.)60,000-40,000=20,000 new)60,000-42,000=18,000
Question:
A short margin account shows the following balances: Credit = $78,000 SMV = $50,000 At what
market value will the account be at the minimum maintenance margin level set by the
self-regulatory organizations? A. $60,000 B. $62,000 C. $65,000 D. $70,000.
Answer:
a 78,000-60,000=18,000=30% minimum maintenance margin level= 30%
Question:
In a new margin account, a customer sells short 100 shares of ABC at 80. What is the minimum
maintenance margin requirement? A. $2,000 B. $2,400 C. $4,000 D. $8,000.
Answer:
b minimum maintenance in a margin account is the greater of $2,000 or 30% of the SMV.
8,000*.30=2,400.
Question:
Short Positions: 100 ABC @ $60 200 XYZ @ $50 Credit = $40,000 SMA = $16,000 Reg. T = 50%
What is the minimum maintenance margin requirement? A. $4,000 B. $4,800 C. $7,200 D. $12,000.
