Question

A customer sells short 100 shares of ABC stock at $30 as an initial transaction in a margin account. The customer must deposit:

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

Answer 1

Answer:

The best answer is C.

Explanation:

Regulation T initial margin to short stock is 50% of $3,000 = $1,500. However, since this is a new account, it must meet the minimum initial margin of $2,000 needed to open an account. Therefore, $2,000 must be deposited.