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Exam Series 63 All Questions

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Exam Series 63 topic 1 question 181 discussion

Actual exam question from FINRA's Series 63
Question #: 181
Topic #: 1
[All Series 63 Questions]

A hypothecation agreement refers to

  • A. an agreement wherein a client gives his broker-dealer discretion to purchase securities that the broker-dealer deems appropriate in whatever quantity the broker-dealer feels appropriate and at a time and price the broker-dealer believes is a good deal.
  • B. an agreement that a client must sign prior to executing any short sales with the broker-dealer.
  • C. an agreement signed by a client who is executing a margin transaction that allows the broker to hold the margined securities in street name as collateral for the loan.
  • D. a document signed by a client indicating that he or she understands that some of the charts and examples presented in a broker-dealer's advertising literature are based on hypothetical trades.
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Suggested Answer: C 🗳️
A hypothecation agreement refers to an agreement signed by a client who is executing a margin transaction that allows the broker to hold the margined securities in street name as collateral for the loan.

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