SIE Exam Question 253: Answer and Explanation

Question: 253

The maximum coverage offered per separate customer under SIPC insurance was set by Congress at:

• A. $250,000 for cash and securities combined
• B. $500,000 for securities and cash combined
• C. $1,000,000 for securities and cash with no more than $250,000 for cash claims
• D. $500,000 for cash and securities coverage with no more than $250,000 for securities claims

Correct Answer: B

Explanation:

B: SIPC was never intended to guarantee customers against investment loss. It's an insurance program providing ½ million dollars of account insurance in the event a customer's brokerage firm goes bankrupt, with the maximum CASH coverage the same as bank FDIC coverage: $250K.