Stocks Intermediate: Types of Stock Accounts

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1.
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.
2.
To churn an account is to _______.
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Execute trades for the sole purpose of generating commissions. To churn an account is to execute trades for the sole purpose of generating commissions.
3.
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.
4.
Option trading involves _______.
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More risk than traditional stocks and bonds. Because there is the potential for significant gains and losses, depending on the movement of the underlying stock, option trading involves significantly higher risk than traditional stocks and bonds.
5.
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.