FINRA Securities Industry Essentials Exam (SIE) SIE Question # 5 Topic 1 Discussion
SIE Exam Topic 1 Question 5 Discussion:
Question #: 5
Topic #: 1
A customer purchases $3,000 of XYZ, which settles today in a margin account. The customer has no other positions or balances. According to initial margin requirements, what is the amount of the required deposit?
Under Federal Reserve Regulation T, customers must deposit at least 50% of the purchase price for margin trades. However, the minimum deposit requirement is $2,000, regardless of the 50% rule, if the account is below this threshold.
50% of $3,000 = $1,500.
Since $1,500 is less than the $2,000 minimum, the customer must deposit the full $2,000.
B is correct because $2,000 is the required minimum deposit.
A is incorrect because the $1,500 calculation does not meet the minimum.
C and D are incorrect because they exceed the minimum deposit requirement.
[Reference: Federal Reserve Regulation T; SIE Study Guide, Chapter 4: Margin Accounts, , , ]
Contribute your Thoughts:
Chosen Answer:
This is a voting comment (?). You can switch to a simple comment. It is better to Upvote an existing comment if you don't have anything to add.
Submit