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D. The SMA funds cannot be withdrawn until the margin requirement is met.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