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 registered representative asks the investor to sign and return the options disclosure agreement _______.
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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.
3.
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.
4.
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.
5.
An arbitrage is the simultaneous purchase and sale of the same or equivalent security on two different markets.
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True. The objective is to take advantage of price discrepancies on the two markets.