Question

A customer sells short 1,000 shares of ABC stock at $4 in a margin account. The customer must deposit:________.

A. $2,000
B. $2,500
C. $4,000
D. $5,000

Answer 1

Answer: $4000

Step-by-step explanation:

A margin account is typically offered by a brokerage firms so that investors can borrow money in order to purchase securities.

A customer sells short 1,000 shares of ABC stock at $4 in a margin account. The customer must deposit:

= $4 × 1000

= $4000