There are 4 critical pieces of information that must be collected to open a new account for an individual customer – Name, Address, __, and
Social Security number
. … To verify the identity of a corporation that wishes to open an account, government issued identification is required to perform the match.
Which of the following information is required on an individual new account form?
There are 4 critical pieces of information that must be collected to open a new account for an individual customer – Name, Address, __, and
Social Security number
. … To verify the identity of a corporation that wishes to open an account, government issued identification is required to perform the match.
Which of the following signatures must appear on the new account form when a customer is opening a cash account?
| Question Answer | For opening a cash account, a customer’s signature is required on the New Account Form: T/F FALSE (the registered rep’s signature is required, i.e. if it’s done over the phone) |
|---|
Which of the following procedures are required at or prior to opening a new options account?
Prior to opening an options account, the new account form must be completed (There is no requirement for a customer signature) and
the customer must be sent the latest Options Disclosure Document (ODD)
. This is a pamphlet entitled “Characteristics and Risks of Standardized Options” and is basically an options primer.
Which of the following options can only be taken in a margin account?
Which of the following options positions can only be taken in a margin account? The best answer is B.
Long stock
can be purchased by making full payment in a cash account.
What is the difference between a margin account and a cash account?
The two main types of brokerage accounts are cash accounts and margin accounts. Cash account requires that all transactions must be made with available cash or long positions. Margin accounts
allow investors to borrow money against the value of the securities in their account
.
What type of account can be opened as a margin account?
A margin account is
a brokerage account
in which the broker lends the customer cash to purchase stocks or other financial products. The loan in the account is collateralized by the securities purchased and cash, and comes with a periodic interest rate.
Which statements are true if a customer’s account is frozen?
When an account is frozen, this means that
the customer did not pay within the maximum time period specified under Regulation T
. When an account is frozen, to buy securities, payment must be made in advance; and to sell securities, delivery of the security must be made in advance. The freeze lasts for 90 days.
Can anyone open a margin account?
At a minimum, most brokerages
require investors to have $2,000 of cash or securities in
an account to open a margin account. Brokerages may request higher amounts, as well. Initially, you must have equity of 50% to trade on margin.
Which of the following parties of an account can give trading authorization to another party? Since only
Second Parties
can open accounts, only a Second Party can give trading authorization to either a First Party (a discretionary account) or to a Third Party (a Third Party trading authorization).
Who approves the opening of an options account?
Before you can trade options,
your broker
must approve your brokerage account for options trading. In order to be approved for options trading, you will need to fill out your broker’s options agreement.
Which of the following options strategies would be considered bullish?
Which two of the following options strategies would be considered “bullish”?
Long calls and short puts
are both “bullish” positions – covered or uncovered.
When opening a new account within an account form what 2 things must be done?
To open an account for a new customer, 4 critical pieces of information must be obtained before the account can be opened –
customer name, mailing address, social security number, and birthdate
. This information must be used to independently verify the customer’s identity within a reasonable time after account opening.
What is the minimum amount which must be remained in a margin account?
The New York Stock Exchange (NYSE) and Financial Industry Regulatory Authority (FINRA) require investors to deposit a minimum of
$2,000
in cash or securities to open a margin account, and some brokerages may require you to deposit more.
How much money do you need for a margin account?
An
initial investment of at least $2,000
is required for a margin account, though some brokerages require more. This deposit is known as the minimum margin. Once the account is opened and operational, you can borrow up to 50% of the purchase price of a stock.
Can I have a margin account but not use margin?
Brokerage firms generally require you to have a margin account to trade options, but they
do not allow you to use margin to purchase options contracts
. However, brokerage firms may allow you to use margin to sell (or write) options contracts.
