SIE practice questioneasyAccount Types: Cash Accounts
A customer opens a cash account at a broker-dealer. Which of the following is TRUE regarding the purchase of securities in this account?
- AOptions can only be purchased, not written.
- BThe customer may borrow money from the broker to pay for securities.
- CShort sales are permitted in this account.
- DAll securities must be paid for in full by settlement date.✓ Correct answer
Explanation
Why D — All securities must be paid for in full by settlement date.
In a cash account, customers must pay the full purchase amount rather than borrowing from the broker. Borrowing and short sales require a margin account, though certain covered option transactions may be permitted in cash accounts.
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