Which of the following scenarios would most likely lead to a violation of 'margin account' rules by an investor using a Canadian brokerage?

Question: Which of the following scenarios would most likely lead to a violation of 'margin account' rules by an investor using a Canadian brokerage?

Answer options:

• Selling shares held in their account without first buying them.
• Maintaining enough equity in the account to meet the margin call. ✅ Failing to meet a margin call, leading to forced liquidation of securities.
• Using borrowed funds to purchase eligible securities.

Correct answer: Failing to meet a margin call, leading to forced liquidation of securities.

Explanation: Failing to meet a margin call means the investor has insufficient equity to cover the required margin, which typically results in the brokerage forcibly selling securities in the account to bring the margin back to acceptable levels, thus violating the margin rules.