Examkin

Soru

Zorluk: KolayMargin Accounts and Borrowing Requirements

An investor opening a new margin account with no existing cash or security balances executes an initial long purchase of 70 shares of stock at $40 per share. What is the minimum initial margin deposit required from the investor under Federal Reserve Regulation T and FINRA rules?

  1. A
    $1,400
  2. $2,000Cevap
  3. C
    $2,800
  4. D
    $700

Cevap

$2,000
For an initial transaction in a new margin account, the customer must satisfy both Federal Reserve Regulation T (50% of the total trade value) and FINRA minimum initial equity rules. Total trade value is 70 × 40=40 = 2,800. While 50% Reg T requires 1,400,FINRArulesspecifythatacustomermustdepositaminimumof1,400, FINRA rules specify that a customer must deposit a minimum of 2,000 for initial long margin purchases between 2,000and2,000 and 4,000. Therefore, the required deposit is $2,000.

Adım Adım Çözüm

1
Calculate the total market value of the purchase.
70 shares × 40pershare=40 per share = 2,800 total purchase value.
Establishing total transaction value is necessary to calculate margin rules.
2
Determine the Federal Reserve Regulation T requirement.
50% of 2,800=2,800 = 1,400.
Regulation T mandates an initial deposit of at least 50% of the purchase value.
3
Apply the FINRA minimum initial equity rule.
Since 2,800isgreaterthan2,800 is greater than 2,000 but 50% (1,400)islessthan1,400) is less than 2,000, FINRA requires a minimum deposit of $2,000.
FINRA rules mandate an absolute initial equity requirement of 2,000(or1002,000 (or 100% of purchase value if total purchase is less than 2,000).

Anahtar Kavram

FINRA Initial Margin Minimum Equity Requirement
Bu soruyu puanla

Konular

Margin Accounts and Borrowing Requirements