ABC stock – 200 shares.
CMV $40/share PDQ stock – 100 shares.
CMV $30/share LIB stock – 100 shares.
CMV $50/ share
Debit balance -- $6,400
If this customer used any SMA in the account to its maximum by purchasing stock, the DR balance in the account would be:
The correct answer is B.
Any time an investor uses SMA, he/she is borrowing money from the broker-dealer and increasing the DR balance. SMA has a purchasing power equaling the SMA x 2 ($1,600 x 2 = $3,200). The broker-dealer will loan the client an additional $3,200 to purchase stock. Add this to the existing DR balance of $6,400 + $3,200 = $9,600.
Understand what a sinking fund is and what companies use it for, along with the tax and general financial benefits that a ...
Understand the fixed-charge coverage ratio, and learn the main advantages and disadvantages of using this particular financial ...
Learn the differences between margin calls and fed margin calls while reviewing the definitions of each and how to satisfy ...
Learn about the average debt-to-equity ratio among insurance providers. Find out about the ranges of D/E among insurers and ...
Open trade equity (OTE) is the equity in an open futures contract.
Any ratio used to calculate the financial leverage of a company ...
Indicators are statistics used to measure current conditions ...
A technical indicator that combines aspects of candlestick analysis ...
The ratio of ceded insurance balances to policyholders’ surplus. ...
A form of technical analysis that looks at the range between ...