SIE practice questionmediumAccount Types – Margin Account Use
A client who wants to sell short must open which type of account?
- AJoint account
- BCash account
- CMargin account✓ Correct answer
- DCustodial account
Explanation
Why C — Margin account
Short sales can only be made in margin accounts because the broker must borrow securities to settle the sale. Cash and custodial accounts cannot be used for short sales.
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