Series 10 Exam Question 8: Answer and Explanation

Question: 8

A customer who purchased 1,000 shares of XYZ on margin two months ago and has not executed any order since must:

• A. Receive a statement this month.
• B. Not receive a statement this month.
• C. Have received a statement for the last two months only.
• D. Have received a statement for the last two months and must receive one this month as well.

Correct Answer: D

Explanation:

A customer must receive a statement whenever there is activity in the account. The investor purchased the shares two months ago and must have received a statement that month. Because the shares were purchased on margin, interest is being charged on the loan. The debiting of interest to the customer's account is considered activity, and the customer must receive a statement for those months as well.