SIE (Securities Industry Essentials) Practice Exam

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Which of the following are required disclosures of a margin agreement before trading can be initiated?

  1. Risk Disclosure Statement

  2. Credit Agreement

  3. Rights and obligations

  4. A & B

The correct answer is: A & B

Before trading can be initiated, a broker-dealer must provide a customer with the Risk Disclosure Statement and the Credit Agreement as required disclosures of a margin agreement. Option C, rights and obligations, is not a required disclosure, as it only outlines what the customer's rights and obligations are when engaging in margin trading. Option A, the Risk Disclosure Statement, and Option B, the Credit Agreement, are both necessary to outline the risks and terms of the margin agreement before the customer can begin trading. Therefore, the correct answer is D, both Option A and Option B.

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