Series 7 practice questionhardMargin Accounts — Long Margin
A long margin account has a market value of $60,000 and a debit balance of $35,000. What is the SMA (Special Memorandum Account) balance?
- A$0✓ Correct answer
- B$2,500
- C$5,000
- D$10,000
Explanation
Why A — $0
Equity in the long margin account is market value minus debit balance: $60,000 - $35,000 = $25,000. The Reg T requirement is 50% of market value, or $30,000. Because the account has no excess equity above the Reg T requirement, the available SMA from the current facts is $0.
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