20-117 in Calculating the Net Capital for a Securities Firms,which

question 16

Multiple Choice

20-117 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:

Casualty Loss Deduction

A tax deduction for property losses as a result of a sudden, unexpected, or unusual event.

Federal Disaster Area

An area officially declared by the government to be in a state of emergency due to a disaster, affording affected individuals potential tax relief and other benefits.

Insurance Settlement

A financial payment made by an insurance company to a policyholder or claimant as a resolution for a filed claim against a policy.

Medical Expense

Expenses related to diagnosing, curing, mitigating, treating, or preventing illnesses, as well as for therapies that impact any body part or its functions.