A:

$150,000 long market value
$(100,000) debit balance
$50,000 credit balance
$5,000 SMA

No short interest at present Reg T margin requirements:
50% initial
25% maintenance

A. The owner of the account can expect a margin call.

B.
If the account owner wanted to buy $10,000 in stock, she would be able to do so only after depositing $5,000 in cash or $10,000 in securities.

C.
The equity in the account exceeds the margin requirement.

D.
The SMA funds cannot be withdrawn until the margin requirement is met.


Correct answer: C
The account is not below the maintenance margin requirement; there is enough cash in the SMA that the investor need not deposit additional funds.

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RELATED TERMS
  1. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin ...
  2. Special Memorandum Account - SMA

    A special account where excess margin generated from a client's ...
  3. Minimum Margin

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  4. Initial Margin

    The percentage of the purchase price of securities (that can ...
  5. Excess Margin Deposit

    Funds deposited in a trading account beyond what is required ...
  6. Credit Balance

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