Series 7 - General Securities Representative Exam

Preview Mode

Jordan Fortin has an unrestricted long margin account at ABC Securities. If the value of Jordan's securities in the account increases by $8000, his SMA will

Increase by $4,000
A
Increase by $8,000
B
Decrease by $8,000
C
Decrease by $4,000
D

Explanations

In an unrestricted long margin account with Regulation T at 50 percent (which you have to assume for the Series 7 exam), the Special Memorandum Account equity will go up by 1/2 of the amount that the account value increases.