What is the maximum amount of margin debt that the Federal Reserve allows one to borrow?
A)50% of the fair market value of the securities on margin upon original purchase and 25% of the value of the collateral on an ongoing basis.
B)25% of the fair market value of the securities on margin upon original purchase and 25% of the value of the collateral on an ongoing basis.
C)25% of the fair market value of the securities on margin upon original purchase and 50% of the value of the collateral on an ongoing basis.
D)75% of the fair market value of the securities on margin upon original purchase and 25% of the value of the collateral on an ongoing basis.
E)None of the above.

Question

Quizplus · Accepted Answer

The Federal Reserve's Regulation T allows investors to borrow up to 50% of the purchase price of securities on margin at the time of purchase. The ongoing maintenance margin requirement, set by FINRA, is typically 25%, but the question's options do not accurately reflect these regulations.

What Is the Maximum Amount of Margin Debt That the Federal