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Exam CRCM topic 1 question 116 discussion

Actual exam question from ABA's CRCM
Question #: 116
Topic #: 1
[All CRCM Questions]

Which of the following is NOT included in the definition of margin stock?

  • A. Stock traded on a national securities exchange
  • B. Nonmargin stock convertible to margin stock
  • C. Debt securities convertible to margin stock
  • D. Warrants to purchase margin stock
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Suggested Answer: B 🗳️

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Cam22
4 months ago
Selected Answer: B
B. Nonmargin stock convertible to margin stock is not automatically considered margin stock until it is actually converted into margin stock. While the potential for conversion may impact its attractiveness to investors, it does not confer the status of margin stock with all associated regulatory implications until such conversion takes place. Thus, nonmargin stock convertible to margin stock does not fall within the standard definition of margin stock until the conversion is executed.
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