Series 7  General Securities Representative Exam
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Your client bought 500 shares of SPEC corp stock on margin at $100 per share with Reg T at 50%. If SPEC is now trading at $120 per share, what is your client's equity?
$41,000
A
$17,500
B
$35,000
C
$25,000
D
Explanations
First, let's figure out the debit balance. LMV  DR = EQ. The client bought $50,000 worth of equities with Reg T at 50%. So, we know that she had to deposit $25,000. That is the original EQ. The LMV is 500 shares x $100 per share (LMV = $50,000). We now can say that initially, $50,000  DR = $25,000. The DR is $25,000. Now, the stock went to $120 per share. so, LMV is now 500 shares x $120 per share = $60,000. $60,000  $25,000 = EQ. The EQ is now $35,000
Pricing
Basic
Part of the questions for each course

 Course
 Questions

 SIE
 20 of 150

 Series 6
 30 of 500

 Series 7
 50 of 625