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1.
A "special miscellaneous account" is an account that allows a margin trader to monitor his or her borrowing power.
True. A special miscellaneous account is a kind of margin sub-account through which a margin trader can keep track of his or her current borrowing power.
2.
A short sale is executed when an investor thinks the value of the stock will _______.
Drop. The investor sells the stock and then buys it back after it has fallen in price.
3.
A wrap account is one in which all associated costs are wrapped into a single fee.
True. A wrap account is a brokerage account in which all associated costs--broker commissions, money management fees, and transaction costs--are wrapped into a single fee.
4.
The registered representative asks the investor to sign and return the options disclosure agreement _______.
Within 15 days of account approval. The registered representative asks the investor to sign and return an options disclosure agreement within 15 days of account approval.
5.
Each time an investor executes a transaction in a cash account, the broker responsible for handling that trade is _______.
Paid a commission. Each time an investor executes a purchase or sale of a security in a cash account, the broker responsible for handling that trade is paid a commission, calculated as a percentage of the total transaction value.