Question

A margin account shows the following: Long Market Value = $12,000 Debit = $4,000 Which statements are TRUE about the excess equity in the account? I Marginable stock can be purchased in an equal amount to the excess II Marginable stock can be purchased in an amount that is twice the excess III If the excess equity is withdrawn, the debit increases by an equal amount IV If the excess equity is withdrawn, the debit increases by twice the amount

Answer 1

The answer is "Option II and III"

Step-by-step explanation:

In the given choices only two option (II and III ) were correct, which can be described as follows:

• Marginal inventory can be decided to buy, in multiple-times-excess amounts.
• It is the same debt, which tends to increase its whilst and it also equivalent to share, if the large amounts of equity were discharged.