Answer: The account is covered for $130,000
Step-by-step explanation:
The options to the questions are:
A. The customer must deposit $90,000 to receive the $220,000 of securities
B. The account is covered for $100,000
C. The account is covered for $130,000
D. The account is covered for $220,000
Based on the above question, it should be noted that the equity in the account of a customer is covered by SIPC and the coverage should not be more than $500,000 while for the cash coverage, there is a limit of $250,000.
Since the account has securities of $220,000 and a $90,000 debit, it simply means that the equity will be:
= $220,000 - $90,000
=$130,000.
The customer will then get securities worth of $130,000 in liquidation.