Stocks Intermediate: Types of Stock Accounts

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1.
A margin account is an account in which the investor pays slightly more than the value of the securities being purchased.
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False. A margin account is one in which the investor does not have to pay the full value of the trade. Instead, the investor borrows.
2.
The investor information required to establish a cash account includes all of the following except _______.
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The investors occupation. In order to establish a cash account, the investor is responsible for providing basic personal information, including his or her name, address and phone number, a tax ID or Social Security number, and proof that he or she is of legal age.
3.
A wrap account is one in which all associated costs are wrapped into a single fee.
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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.
A "special miscellaneous account" is an account that allows a margin trader to monitor his or her borrowing power.
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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.
5.
A call option grants the owner the right to buy 100 shares of a particular security at a pre-determined price.
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True. A call option grants the owner the right to buy 100 shares of a particular security at a pre-determined price.