Account Chapter Test Questions

Question 1

If a customer wants to pay with fully paid, marginable stock to meet a margin call, how much must they deposit?

Answer 1

They must deposit double the cash amount of the margin call - if call is for $20,000, then they must deposit $40,000 of fully paid marginable stock

Question 2

Can the SMA be used to reduce the restriction on a margin account?

Answer 2

NO - it cannot. Only cash or depositing/selling stock will reduce the restriction

Question 3

Dividends paid to a restricted margin account can be withdrawn at what %?

Answer 3

100% - they are used 100% to pay down the debit and credited 100% to the SMA

Question 4

When a short sale is affected, the BD can require the seller to provide the stock to the lenders at _____

Answer 4

any time

Question 5

A short cover in a margin account will get credited to the ______ balance

Answer 5

credit balance, not the equity balance

Question 6

Long options contracts are or are not marginable?

Answer 6

ARE NOT - they will expire soon and therefore cannot be margined

Question 7

If a customer wishes to write a put in a cash account, they must deposit _____

Answer 7

100% of the strike price value - this covers the put

Question 8

A customer is short 100 shares and sells a put @ $5. How much do they need to deposit for the put?

Answer 8

$0 - the put is covered by the shares. They can take out the premiums received.

Question 9

If a customer wants to open a portfolio margin account, they must receive and sign the disclosure _____

Answer 9

at or prior to the initial transaction in the account - cannot wait 15 days like with an options account