Margin Accounts
A customer has a long margin account with a $20,000 debit balance. At what market value would a 25% maintenance call be triggered?
The trigger price formula for long accounts is: DR / (1 - Maintenance %) = $20,000 / 0.75 = $26,667. If the market value falls below $26,667, equity would be below 25% and a maintenance call would be issued.
Complete Analysis & Legal Rationale
The trigger price formula for long accounts is: DR / (1 - Maintenance %) = $20,000 / 0.75 = $26,667. If the market value falls below $26,667, equity would be below 25% and a maintenance call would be issued.
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:
Does not match the governing securities rule described in the explanation.
Does not match the governing securities rule described in the explanation.
Matches the verified teaching point in the explanation.
Does not match the governing securities rule described in the explanation.
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.