Accounts & CustomersQuestion 62 of 125
A customer holds long stock with a current market value of $40,000 and a debit balance of $32,000. Using the 25% maintenance requirement, what is the status of the account?
a.A maintenance call is triggered because equity of $8,000 is below the $10,000 required
b.No call; equity exceeds the requirement by $8,000
c.No call; equity exactly equals the requirement
d.A call is triggered because the debit exceeds market value
Explanation
Equity equals market value minus the debit balance: $40,000 - $32,000 = $8,000. The maintenance requirement is 25% of the $40,000 market value, or $10,000. Because equity of $8,000 is below the $10,000 minimum, the account is deficient by $2,000 and a maintenance call is triggered.
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