Margin Accounts
A customer shorts 200 shares at $50, depositing 50% margin. The credit balance is:
For a short sale, Credit Balance = Sale Proceeds + Margin Deposit. Sale proceeds = 200 x $50 = $10,000. Margin deposit = 50% x $10,000 = $5,000. Credit balance = $10,000 + $5,000 = $15,000. The credit balance represents
Complete Analysis & Legal Rationale
For a short sale, Credit Balance = Sale Proceeds + Margin Deposit. Sale proceeds = 200 x $50 = $10,000. Margin deposit = 50% x $10,000 = $5,000. Credit balance = $10,000 + $5,000 = $15,000. The credit balance represents the total funds held by the broker.
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: Outline-level citation: item maps to Series 7 topic coverage. Prefer a specific FINRA/SEC/MSRB rule citation in a later author pass.