Finra Exam Series-7 Topic 7 Question 46 Discussion

Actual exam question for Finra's Series-7 exam

Question #: 46
Topic #: 7

Under an initial federal requirement of 70% equity, Bubba purchases 100 shares of XYZ at $40 per share and wishes to satisfy the margin call by delivering another listed security into his account.

He may do so by depositing stocks with a market value of:

A$9,333

B$5,714

C4,000

D$2,800

Show Suggested Answer

Suggested Answer: A

$9,333. If Bubba were depositing cash, he would need $2,800 (70% x $4,000). Since he is depositing stock, he would have to deposit enough with loan value of $2,800. To arrive at this, divide $2,800 by the 30% loan value to obtain $9,333.

by Benedict at May 09, 2022, 05:57 PM

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