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SIE practice questioneasyAccount Types

Which type of account allows an investor to borrow money from a broker-dealer to purchase securities?

  1. ACash account
  2. BCustodial account
  3. CRetirement account
  4. DMargin account✓ Correct answer
Explanation

Why D — Margin account

A margin account allows investors to borrow funds from their broker-dealer to purchase securities, using the securities as collateral. Cash accounts (A) require full payment. Custodial accounts (C) are managed on behalf of minors. Retirement accounts (D) such as IRAs generally do not permit margin trading.

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