Question

Under industry regulations, an initial purchase of $3,000 of common stock in a margin account requires a cash deposit of:

A. $750
B. $1,500
C. $2,000
D. $3,000

Answer 1

The cash deposit required for an initial purchase of $3,000 of common stock in a margin account is $1,500.

Step-by-step explanation:

The correct answer is B. $1,500.

Under industry regulations, an initial purchase of $3,000 of common stock in a margin account requires a cash deposit equal to 50% of the purchase amount. So, in this case, 50% of $3,000 is $1,500. Therefore, the cash deposit required would be $1,500.