SIE practice questionmediumRegulation T
Under Regulation T, the initial margin requirement for purchasing equity securities is:
- A25%
- B75%
- C50%✓ Correct answer
- D100%
Explanation
Why C — 50%
Regulation T, set by the Federal Reserve Board, requires an initial margin deposit of 50% of the purchase price for equity securities. If an investor buys $10,000 worth of stock on margin, they must deposit at least $5,000. The remaining $5,000 is borrowed from the broker-dealer. The 25% (A) is the NYSE/FINRA maintenance margin requirement, not the initial requirement.
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