Financial Industry Regulatory Authority (FINRA) Practice Exam 2025 - Free FINRA Practice Questions and Study Guide

The initial margin requirement can indeed vary based on the type of security being purchased. This is because different securities come with different levels of risk as determined by market volatility, liquidity, and other relevant factors. For instance, stocks might have a standard initial margin requirement, while more volatile securities such as options or certain types of bonds may have higher requirements to mitigate risk exposure.

Additionally, the Federal Reserve and self-regulatory organizations like FINRA set different margin requirements for different asset classes to protect the integrity of the margin system. This means that the requirement can be specifically tailored based on the characteristics of the security being acquired, ensuring that both the broker and the investor are adequately protected given the potential for price fluctuations.

While the total market value, customer's credit history, and interest rates can influence the cost and financial viability of purchasing securities on margin, they do not change the fundamental regulatory requirements that dictate the initial margin percentage based on the security type itself.