"A customer has an account with a brokerage firm that is in receivership. The account holds $220,000 of securities and has a $90,000 debit. Which statement is TRUE regarding SIPC coverage?"

The account is covered for $130,000

Explanation:

The options to the questions are:

A. The customer must deposit $90,000 to receive the $220,000 of securities

B. The account is covered for $100,000

C. The account is covered for $130,000

D. The account is covered for $220,000

Based on the above question, it should be noted that the equity in the account of a customer is covered by SIPC and the coverage should not be more than $500,000 while for the cash coverage, there is a limit of $250,000.

Since the account has securities of $220,000 and a $90,000 debit, it simply means that the equity will be:

= $220,000 - $90,000

=$130,000.

The customer will then get securities worth of $130,000 in liquidation.

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