SIE (Securities Industry Essentials) Practice Exam

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Under industry regulations, an initial purchase of $3,000 of common stock in a margin account requires a cash deposit of:

$1,000
$1,500
$2,000
$2,500

The correct answer is: $2,000

An initial purchase of $3,000 of common stock in a margin account requires a cash deposit of $2,000 because under industry regulations, the initial margin requirement for common stock is 50%. This means that you must have at least half of the total purchase price in cash in your account in order to make the purchase. Option A and B are lower than the required 50% margin, while option D is higher than the required amount. Therefore, option C is the correct answer.