In Calculating the Net Capital for a Securities Firms, Which

question 68

Multiple Choice

In calculating the net capital for a securities firms, which of the following is NOT an adjustment to the book value of net worth?

• A)The market value of net worth is calculated on a day-to-day basis.
• B)A series of adjustments are made to reflect unrealized profits and losses, subordinated liabilities, deferred taxes, options, and futures.
• C)The amount of securities that cannot be publicly sold are subtracted.
• D)All assets not readily converted into cash are subtracted.
• E)Haircuts to reflect potential market value fluctuations in asset values are deducted.

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Definitions:

Great Depression

A severe worldwide economic depression in the 1930s, marked by high unemployment, deflation, and significant declines in economic activity.

Aggregate Demand

The total demand for all goods and services in an economy at various price levels, at a given point in time.

Aggregate Supply

The total amount of goods and services that producers are willing and able to supply at a given overall price level in an economy.

Market Risk

Market risk, also known as systematic risk, refers to the potential for investors to experience losses due to factors that affect the overall performance of the financial markets.