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Finra Series-7 Exam - Topic 2 Question 62 Discussion

Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:100 ABC $30200 XYZ $70200 QBB $40200 KKK $25Total market value = $30,000Debit balance in the account = $12,000Net equity balance of the account = $18,000Bubba wants to buy 100 shares of DUM at $30 per share and 100 shares of OUT at $120. How much additional money must be deposited?
C) $4,500
A) $6,000
B) $7,000
D) $1,500

Finra Series-7 Exam - Topic 2 Question 62 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 62
Topic #: 2
[All Series-7 Questions]

Regulation T is set at 50%. Bubba's account contains long positions in the following securities with the prices listed:

100 ABC $30

200 XYZ $70

200 QBB $40

200 KKK $25

Total market value = $30,000

Debit balance in the account = $12,000

Net equity balance of the account = $18,000

Bubba wants to buy 100 shares of DUM at $30 per share and 100 shares of OUT at $120. How much additional money must be deposited?

Show Suggested Answer Hide Answer
Suggested Answer: C

$4,500. The purchase of DUM will cost $3,000 (100 x $30) and the purchase of OUT will cost $12,000 (100 x $120). Both combined total a cost of $15,000. Reg T requires 50% ($7,500) and Bubba only has $3,000. So he is $4,500 short.


by Rolande at Dec 06, 2022, 03:21 AM

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Julio
10 months ago
Totally agree, $6,000 sounds about right!
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Elfrieda
10 months ago
Wait, is that right? Seems off to me.
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Matthew
10 months ago
I think Bubba needs to deposit $6,000.
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Augustine
11 months ago
Gotta love margin rules!
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Lenita
11 months ago
Regulation T is indeed 50%.
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Leah
11 months ago
I feel like I might be overthinking this. The total cost is $15,000, and with Regulation T, Bubba needs to cover half of that, but I’m not sure how to factor in his current equity.
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Donette
11 months ago
If I remember correctly, the total market value of the new shares will impact the required equity. I think we might need to add the cost of DUM and OUT together first.
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Annabelle
11 months ago
I think we need to find out how much equity Bubba has after the new purchases. I practiced a similar question, but I can't recall the exact steps for the additional deposit calculation.
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Vivienne
11 months ago
I remember something about calculating the total cost of the new shares and then figuring out how much equity is needed. But I'm not sure how to apply the Regulation T requirement here.
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Ricarda
11 months ago
Ah, I see now - the key is to choose the three options that allow the Disaster to schedule the Service Appointments while taking the Scheduling Policy into account.
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Devorah
11 months ago
I'm leaning towards 25 MB because that sounds familiar, but I might be mixing it up with something else from the study guide.
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Marg
11 months ago
Could be an access issue too - maybe the user permissions aren't set up correctly. Option B seems possible.
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Amber
11 months ago
Ah, I remember learning about this in class. The Ethereum Blockchain uses a Merkle Patricia Trie to store data, which is a modified version of a Radix Trie. So the correct answer is option B.
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