Finra Exam Series-7 Topic 2 Question 62 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 62
Topic #: 2

[All Series-7 Questions]

Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:

100 ABC $30

200 XYZ $70

200 QBB $40

200 KKK $25

Total market value = $30,000

Debit balance in the account = $12,000

Net equity balance of the account = $18,000

Bubba wants to buy 100 shares of DUM at $30 per share and 100 shares of OUT at $120. How much additional money must be deposited?

A$6,000

B$7,000

C$4,500

D$1,500

Show Suggested Answer

Suggested Answer: C

$4,500. The purchase of DUM will cost $3,000 (100 x $30) and the purchase of OUT will cost $12,000 (100 x $120). Both combined total a cost of $15,000. Reg T requires 50% ($7,500) and Bubba only has $3,000. So he is $4,500 short.

by Rolande at Dec 06, 2022, 03:21 AM

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