SIE practice questionmediumAccount Types: Margin Accounts
A customer wants to buy shares using money borrowed from the broker. What documentation is required to open a margin account?
- AA trust deed is required.
- BA custodial agreement must be provided.
- CA margin agreement must be signed by the customer.✓ Correct answer
- DNo documentation is needed.
Explanation
Why C — A margin agreement must be signed by the customer.
A customer must sign a margin agreement before borrowing funds from the broker-dealer to buy securities. Custodial and trust documents apply to different account types, and margin borrowing cannot occur without required documentation.
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