Margin Accounts
Which statements about margin account disclosure requirements are TRUE? I. Interest charges must be disclosed. II. Risks of margin must be explained. III. Maintenance requirements must be stated. IV. Margin calls are never required.
Margin disclosures: interest, risks, maintenance requirements. Margin calls ARE required.
Complete Analysis & Legal Rationale
Margin account disclosures must include interest charges (I), margin risks (II), and maintenance requirements (III). Statement IV is false - margin calls ARE required when equity falls below maintenance levels.
Distractor Autopsy (Why Other Options Are Traps)
FINRA exam writers design incorrect distractors using specific calculation mistakes and regulatory misconceptions. Review why each option succeeds or fails:
Statements II and III are also true disclosure requirements.
Statement III (maintenance requirements) is also required.
Matches the verified teaching point in the explanation.
Statement IV is false - margin calls are absolutely required.
Official Standard: Federal Reserve Regulation T margin/credit rules for broker-dealers (verify current text).
Official Standard: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.