SIE practice questionmediumAccount Types: Margin Maintenance
In a margin account, what happens if equity falls below the maintenance requirement?
- AThe account will be closed immediately.
- BThe customer may borrow additional funds.
- CThe customer will receive a margin call to deposit more funds.✓ Correct answer
- DThe broker must sell all securities in the account.
Explanation
Why C — The customer will receive a margin call to deposit more funds.
A margin call requires the customer to restore required equity. B is incorrect—additional borrowing isn’t permitted in this situation. C and D are too extreme; liquidation occurs only if the call isn't met.
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.
Related Trading & Settlement questions
- A customer wants to sell shares short. Which account type is REQUIRED?
- A customer in a cash account places a market order to buy shares. What does a market order guarantee?
- A customer in a cash account is worried about a price drop. Which order type will GUARANTEE a sell order if the stock…
- Which federal regulation sets the initial margin requirement for purchasing securities on margin?