Q:
A
brokerage customer has $10,000 in securities and a credit
balance of $4,000. What is the equity in the person's
account?
a) $4,000
b) $6,000
c) $10,000
d) $14,000
e) none of the above
A:

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
balance.

Have a Financial Question?

RELATED FAQS

  1. A customer has a short margin account. The account has equity of $15,000 ...

    Free info on financial certification exams including study guides, exam questions, and much more!
  2. XYZ Corp. has a debt to equity ratio of 42%. If net income is $200,000 ...

    The correct answer is: a) Step 1: Determine the book value of equity Since D/E = .42/1
  3. A Straddle

    A. Speculates on the rate of change of a security's market price. B. Speculates on the rate of change of an option's market ...
  4. You currently own a mutual fund with a Net Asset Value (NAV) of $11.25 ...

    The correct answer is d In mutual funds, the NAV is the total value of the fund's portfolio less liabilities. The NAV is ...
  5. Which of the following is not a reason why a company might issue a stock dividend ...

    The correct answer is d. All of these are reasons for a company to issue a stock dividend, remember that this differs from ...
  6. In a Corporation's financials, surplus earnings are accounted for as ...

    D is the correct answer. Surplus earnings are either plowed back into the company (retained earnings) or they are paid out ...
RELATED TERMS
  1. SEC Form D

    A filing with the Securities and Exchange Commission (SEC) required ...
  2. Credit Card Balance

    The amount of charges, or lack thereof, owed to the credit card ...
  3. Regulation D - Reg D

    A Securities and Exchange Commission (SEC) regulation governing ...
  4. New Balance

    The new balance is the sum of your previous balance, payments, ...
  5. Average Balance

    The balance on a loan or depositary account. A simple average ...
  6. Balance Chasing

    The gradual lowering of a consumer’s credit limit by a credit ...
Hot Definitions
  1. IRS Publication 970

    A document published by the Internal Revenue Service (IRS) that provides information on tax benefits available to students ...
  2. Federal Direct Loan Program

    A program that provides low-interest loans to postsecondary students and their parents. The William D. Ford Federal Direct ...
  3. Cash Flow

    The net amount of cash and cash-equivalents moving into and out of a business. Positive cash flow indicates that a company's ...
  4. PLUS Loan

    A low-cost student loan offered to parents of students currently enrolled in post-secondary education. With a PLUS Loan, ...
  5. Graduate Record Examination - GRE

    A standardized exam used to measure one's aptitude for abstract thinking in the areas of analytical writing, mathematics ...
  6. Graduate Management Admission Test - GMAT

    A standardized test intended to measure a test taker's aptitude in mathematics and the English language. The GMAT is most ...
Trading Center