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Official Practice ProblemFINRA Series 7 Blueprint: Function 1
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Question #s7-prep3-s7-q-366Function 1Fundamental

Margin Accounts

A short seller must maintain a minimum equity of what percentage of the short market value?

Correct Choice: B

Short maintenance is higher (30% vs 25%) due to unlimited risk potential.

Complete Analysis & Legal Rationale

Short positions require a 30% minimum maintenance margin because of their unlimited risk potential. This is higher than the 25% requirement for long positions.

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:

Choice AIncorrect
Concept Trap

25% is the maintenance requirement for long positions, not short.

Choice BCorrect
None

Matches the verified teaching point in the explanation.

Choice CIncorrect
Concept Trap

50% is the initial margin requirement, not maintenance.

Choice DIncorrect
Concept Trap

100% is not a standard margin requirement.

Authorities & References:

Official Standard: Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.

Official SourceFINRA FINRA Series 7 Content Outline — General Securities Representative Examination (Series 7) Content Outline
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Regulatory Authority & Citations: Primary Legal Sources

Verified citations governing Question #s7-prep3-s7-q-366 (FINRA Series 7 Content Outline)

To pass the FINRA Series 7, candidates must understand not just the calculation formulas, but the exact federal securities acts, SRO rulebooks, and statutory frameworks that enforce them. Review the primary authority records below:

FINRAFINRA Series 7 Content Outline— General Securities Representative Examination (Series 7) Content Outline

Outline-level citation pending rule-specific upgrade. Verify against current FINRA materials.

Read FINRA Official Rule

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