Certified Regulatory Compliance Manager (CRCM) — Question 50

Under collateral requirements-12CFR 221.7, maximum loan value of margin stock is:

Answer options

• A. Currently 50 percent of the current market value
• B. Currently 70 percent of the current market value
• C. Subject to change by the Federal Reserve
• D. Subject to change by the Equity Reserve

Correct answer: A, C

Explanation

The correct answer A reflects that the maximum loan value for margin stock is set at 50 percent of its current market value. Option B is incorrect as it states a higher percentage than allowed, while option C is also correct since the Federal Reserve can alter these requirements. Option D is incorrect because the Equity Reserve does not have the authority to change this maximum loan value.