SIE practice questionmediumMaintenance Margin
FINRA's minimum maintenance margin requirement for long equity positions is:
- A30% of the original purchase price
- B10% of the current market value
- C50% of the current market value
- D25% of the current market value✓ Correct answer
Explanation
Why D — 25% of the current market value
FINRA Rule 4210 sets the minimum maintenance margin at 25% of the current market value for long equity positions. If the equity in the account falls below this level, the investor will receive a margin call (maintenance call) and must deposit additional funds or securities. Many broker-dealers set their own 'house maintenance' requirements higher than the 25% FINRA minimum, often at 30-35%.
Turn it into reps
Reading one answer is not the same as being ready
Lucky the Banker is a free practice app with 1,867+ SIE questions, weak-area tracking, and timed mock exams. No credit card, no paywall.
Spot an error in this question or explanation? Tell us — we fix these fast.
Related Trading & Settlement questions
- An investor purchases $20,000 worth of stock in a margin account, depositing the required Reg T margin of $10,000. If…
- Under Regulation T, the initial margin requirement for purchasing equity securities is:
- Under FINRA rules, a pattern day trader is defined as a customer who executes how many day trades within five business…
- A trade executed with 'cash settlement' terms requires delivery and payment by:
- A customer in a cash account buys shares and sells them at a profit before paying for the original purchase. This…
- U.S. Treasury bills typically settle on what basis?
- The Employee Retirement Income Security Act (ERISA) applies to which of the following?
- For tax purposes, when is a securities transaction generally considered to have occurred?