Series 7 Exam Question

While there are not a large number of margin questions on the series 7 exam, students must be able to answer them correctly to help ensure passing the exam. Here is a typical series 7 margin question:

An investor has an open margin account with $48,000 in market value and a debit balance of $10,000. His minimum equity at this level is:




(A) $24,000

(B) $12,000

(C) $13,333

(D) $10,000

 
 
(B) To find the minimum equity given a long market value, simply multiply the market value by .25 in this case $48,000 X. 25 = $12,000. Therefore the customer must have at least $12,000 in equity to hold a position with a long market value of $48,000. This investor has $38,000 in equity.


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