SIE practice questionmediumSIPC Coverage Limits
What is the maximum SIPC coverage per customer at a failed broker-dealer?
- A$1,000,000 total
- B$500,000 total, including up to $250,000 for cash✓ Correct answer
- C$250,000 for securities only
- D$100,000 total
Explanation
Why B — $500,000 total, including up to $250,000 for cash
SIPC coverage is up to $500,000 per customer, of which up to $250,000 may be in cash. For example, if a customer has $400,000 in securities and $200,000 in cash at a failed firm, SIPC would cover the $400,000 in securities but only $250,000 of the $200,000 cash, for total coverage of $650,000... but capped at $500,000. Securities valued above $500,000 or cash above $250,000 would not be fully covered. Separate accounts (e.g., joint, IRA) may each have separate coverage.
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