General Securities Representative (Series 7) Practice Exam

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Prepare for the Series 7 Exam for General Securities Representatives. Study with comprehensive multiple-choice questions, each with detailed explanations to ensure you understand key concepts. Excel in your exam with confidence!

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What document must a customer return within 15 days of opening a margin account?

Risk disclosure document
Options agreement
Margin agreement
Account statement

The correct answer is: Options agreement

The correct document that must be returned within 15 days of opening a margin account is the margin agreement. The margin agreement outlines the terms and conditions of borrowing funds to purchase securities, detailing the credit being extended by the brokerage firm, as well as the customer's obligations regarding maintenance margins and other requirements. When a customer opens a margin account, they are expected to understand the risks involved in margin trading, such as the potential for magnified losses and the possibility of margin calls. The margin agreement serves as a crucial legal document that both parties (the brokerage and the customer) agree upon, and it is essential for protecting the firm's interests while also informing the customer of their responsibilities and the risks inherent in trading on margin. While the risk disclosure document does inform customers about the potential risks of trading on margin, it is not required to be returned within the specified timeframe. The options agreement pertains specifically to the trading of options, which differs from margin transactions. Account statements are routine reports provided to account holders regarding their holdings and transactions but are not documents that need to be returned after account opening. Thus, the margin agreement is the key document that necessitates prompt attention after the account setup.