Certified Regulatory Compliance Manager (CRCM) — Question 48

Margin stock includes:

Answer options

• A. Equity securities registered or having delisted trading privileges on a national securities exchange:
• B. Over-the-counter (OTC) securities that do not qualify for trading in the National Market System
• C. Warrants or rights to subscribe to or purchase a common stock
• D. Securities issued by an investment company registered under the Investment Company Act, except for: A company licensed under the Small Business Investment Company Act A company that has at least 95 percent of its assets continuously invested in exempted securities; or A company that issues face-amount certificates; or A company that is considered a money market fund under the SEC Rules

Correct answer: D

Explanation

The correct answer is D because it specifies the types of investment company securities that are excluded from being classified as margin stock. Options A, B, and C are incorrect as they pertain to various other types of securities that do not fit the definition of margin stock under the regulations.