SIE (Securities Industry Essentials) Practice Exam

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Prepare for your Securities Industry Essentials Exam. Engage with multiple-choice questions designed to enhance your understanding of the financial industry. Build your confidence and knowledge base as you get ready for your certification!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

Under Reg T, what is the required initial margin percentage in the account when the account is first established?

50%
25%
75%
100%

The correct answer is: 50%

The required initial margin percentage in the account when the account is first established is 50%. This means that investors must provide at least 50% of the total purchase price of a security, while the remaining 50% can be borrowed from the broker. Option B, 25%, is incorrect because it is too low and would result in more borrowing and potential risk for the investor. Option C, 75%, is also incorrect because it is too high and would require the investor to use more of their own funds and have less leverage. Option D, 100%, is incorrect because it is not possible for investors to fully fund their trades with their own capital. Overall, Reg T requires an initial margin percentage of 50% in order to balance the use of leverage and potential risk for investors.