Question

A customer of a brokerage firm in liquidation has an individual account with $300,000 in securities. The customer and his wife have a joint account with $500,000 in securities. The wife has an individual account with $300,000 in securities. What will the customers receive under SIPC?

Answer 1

Answer:

The correct answer is $1,100,000.

Explanation:

According to the scenario, the given data are as follows:

Customer account = $300,000

Joint account = $500,000

Customer's wife account = $300,000

So, we can calculate the amount that customer receive under SIPC by using the following formula:

SIPC =

• Under SIPC each account considered as an individual account.
• A maximum limit cover of $500,000 for cash and security for each individual account.

So, the amount that can receive by customer is:

Total Amount  = $300,000 + $500,000 + $300,000  

= $1,100,000

Hence, the total amount that customer receive under SIPC is $1,100,000.