Q:
A customer has a short margin account. The account has equity of $15,000 and a credit balance of $28,000. What is the current NYSE minimum maintenance equity requirement on this account?

A) $3900
B) $4500
C) $3250
D) $3750

A:

The correct answer is a) $3900

The minimum maintenance on short accounts is 30% of the current market value. The credit balance is $28,000. The market value can be found by subtracting the equity ($15,000) from the credit balance ($28,000). This puts the short market value at $13,000. $13,000 times 30% is $3900.
© 2004 American Investment Training, Inc.


RELATED FAQS

  1. A brokerage customer has $10,000 in securities and a credit balance of $4,000 ... ...

    The correct answer is d The market value of the person's equity is equal to the market value of the securities plus the credit ...
  2. Customer account records of NFA members must be kept for ...

    Free info on financial certification exams including study guides, exam questions, and much more!
  3. What are the minimum margin requirements for a short sale account?

    In a short sale transaction, the investor borrows shares and sells them on the market in the hope that the share price will ...
  4. What does it mean when the shares in my account have been liquidated?

    An account liquidation occurs when the holdings of an account are sold off by the firm in which the account was created. ...
  5. Committing acts against the Commodity Exchange Act can result in fines up to ... ...

    Free info on financial certification exams including study guides, exam questions, and much more!
  6. How is buying on margin regulated by the Securities and Exchange Commission (SEC)?

    Learn how FINRA and the Federal Reserve regulate margin account trading, and understand how pattern day trading can impact ...
RELATED TERMS
  1. Free Credit Balance

    The cash held by a broker in a customer's margin account that ...
  2. Maintenance Margin

    The minimum amount of equity that must be maintained in a margin ...
  3. Minimum Balance

    The minimum dollar amount that a customer must have in an account ...
  4. House Maintenance Requirement

    The minimum amount of equity that an account holder must maintain ...
  5. Remargining

    The process of bringing an account up to minimum equity standards ...
  6. Account Balance

    1. The amount of money in a financial repository, such as a checking ...
Hot Definitions
  1. Sharpe Ratio

    The Sharpe Ratio is a measure for calculating risk-adjusted return, and this ratio has become the industry standard for such ...
  2. Death Taxes

    Taxes imposed by the federal and/or state government on someone's estate upon their death. These taxes are levied on the ...
  3. Retained Earnings

    Retained earnings is the percentage of net earnings not paid out as dividends, but retained by the company to be reinvested ...
  4. Demand Elasticity

    In economics, the demand elasticity refers to how sensitive the demand for a good is to changes in other economic variables. ...
  5. Dark Pool

    A dark pool is a private financial forum or exchange for trading securities.
  6. Quadruple Witching

    The expiration date of various stock index futures, stock index options, stock options and single stock futures. All stock ...
Trading Center