1- Which of the following agencies provides customer insurance protection for individual brokerage accounts?
a. Federal Deposit Insurance Corporation (FDIC)
b. Federal Investor Protection Agency (FIPA)
c. Securities Investor Protection Corporation (SIPC)
d. Securities Investor Insurance Agency (SIIA)
2. Which of the following is not a standard provision of ahypothecation agreement?
a. right of a broker to lend shares held in street name for a beneficial owner
b. right of a broker to pledge shares held in street name as collateral for margin loans
c. right of a broker to short sell shares held in street name for a beneficial owner
d. all of the above are standard provisions of a hypothecation agreement
3. You deposit $100,000 cash in a brokerage account and purchase $200,000 of
stocks on margin by borrowing $100,000 from your broker. Later, the value of your stock holdings fall to $150,000 whereupon you get nervous and close out your account. What is the percent return on your investment?
a. 0 percent
b. -25 percent
c. -50 percent
d. -75 percent
4- You deposit $100,000 cash in a brokerage account and short sell $200,000 of stocks. Later, the value of the stocks held short holdings rises to $250,000 whereupon you get nervous and close out your account. What is the percentage return on your investment?
a. 0 percent
b. -25 percent
c. -50 percent
d. -75 percent
5. You deposit $100,000 cash in a brokerage account and purchase$200,000 of stocks on margin by borrowing $100,000 from your broker. Later, the value of
your stock holdings falls to $175,000. What is your account margin in dollars?
a. $50,000
b. $75,000
c. $100,000
d. $150,000
6. You deposit $100,000 cash in a brokerage account and purchase$200,000 of stocks on margin by borrowing $100,000 from your broker. Later, the value of
your stock holdings falls to $150,000. What is your account margin in percent?
a. 25 percent
b. 33 percent
c. 50 percent
d. 75 percent
7. You deposit $100,000 cash in a brokerage account and short sell$200,000 of stocks on margin. Later, the value of the stocks held short rises to $225,000.
What is your account margin in dollars?
a. $50,000
b. $75,000
c. $100,000
d. $150,000
8- You deposit $100,000 cash in a brokerage account and short sell$200,000 of stocks on margin. Later, the value of the stocks held short rises to $250,000. What is your account margin in percent?
a. 20 percent
b. 25 percent
c. 33 percent
d. 50 percent
9. You deposit $100,000 cash in a brokerage account and purchase $200,000 of stocks on margin by borrowing $100,000 from your broker, who requires maintenance margin of 30 percent. Which of the following is the largest value for your stock holdings for which you will still receive a margin call?
a. $200,000
b. $160,000
c. $140,000
d. $120,000
10. You deposit $100,000 cash in a brokerage account and short sell $200,000 of stocks. Your broker requires maintenance margin of 30 percent. Which of the following is the lowest value for the stocks you are holding short for which you will still receive a margin call?
a. $260,000
b. $240,000
c. $220,000
d. $200,000