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Finra Series-7 Exam - Topic 4 Question 49 Discussion

Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500.What is the equity in Bubba's account?
B) $20,000
A) $500
C) $20,500
D) $37,000

Finra Series-7 Exam - Topic 4 Question 49 Discussion

Actual exam question for Finra's Series-7 exam
Question #: 49
Topic #: 4
[All Series-7 Questions]

Bubba has a short margin account with a short market value of $22,000, a credit balance of $42,000, and SMA of $500.

What is the equity in Bubba's account?

Show Suggested Answer Hide Answer
Suggested Answer: B

$20,000. The equity in a short margin account is equal to the credit balance minus the short market value. SMA is not considered when computing equity.


by An at May 09, 2022, 04:25 AM

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Nilsa
10 months ago
I thought it would be lower, but $20,500 seems correct.
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Nydia
10 months ago
Wait, how does SMA factor into this?
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Dorothy
11 months ago
Definitely agree with that, $20,500 makes sense!
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Providencia
11 months ago
I think it's $20,500, right?
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Avery
11 months ago
Equity is calculated as credit balance minus short market value.
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Silva
11 months ago
I’m a bit confused about how to incorporate the SMA into the equity calculation. Does it add to the total or is it separate?
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Ernestine
11 months ago
I remember a practice question where we had to find equity in a margin account, and I think it was similar to this one. Could it be $20,500?
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Pamella
11 months ago
I think the equity is calculated by subtracting the short market value from the credit balance, but I'm not entirely sure how the SMA factors in.
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Nu
11 months ago
I feel like the answer might be $20,000, but I’m not confident. I wish I had reviewed more margin account examples before the exam.
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Kate
11 months ago
This question seems straightforward, I think I can handle it.
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Tayna
11 months ago
I should have paid more attention to the SSH configuration part; C seems off, but I can't remember what's right.
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