If a customer buys $10,000 worth of stock in a cash account, then sells the shares for $12,000 without first paying for the buy side, and then requests the $2,000 profit, which of the following statements are TRUE? I. The $2,000 profit cannot be sent to the customer until he pays for the buy side in full.
II. The $2,000 can be sent to the customer, but the account will be frozen for 90 days.
III. If the customer pays for the buy side in full on or before the fifth business day following trade date, status as a frozen account is lifted.
IV. Both trades must be switched to the customer's margin account, where buying and selling in this manner are acceptable practices.
A) III and IV.
B) II and III.
C) I and II.
D) I and III.

B) II and III.

Explanation:

Based on the information given the statement that are TRUE are II and III

II. The amount of $2,000($10,000-$12,000) which is the profit for the business will be given to the customer but the customer account will have to be frozen or put on hold for 90 days because the customer had not paid for the buy side before selling the shares for the amount of $12,000

III. In a situation where customer paid the amount for the buy side in full either before or after the fifth business day which is the day that follows the trading date, the customer account that had be frozen will be unfrozen or lifted because the buy side amount had be paid in full.

a. $48.75

is the answer to your question

1. c

2. b

3. a

4. c

5. a

6. b

7. c

8. c

9.b

10. d

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