Series 7 practice questionmediumMargin Accounts 6
A customer buys stock on margin for $9,000 and deposits 50%. If the market value later falls to $8,500, the customer’s equity is:
- A$4,000✓ Correct answer
- B$5,125
- C$4,500
- D$2,125
Explanation
Why A — $4,000
In a long margin account, equity equals market value minus the debit balance. Here, equity is $8,500 - $4,500 = $4,000.
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