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

To understand the coverage provided for a joint account, it's important to look at both the market value and the debit balance. In this scenario, the joint account has a total market value of $1 million, but there is a debit balance of $600,000, which represents the amount borrowed against the assets in the account.

The coverage in this case is calculated by subtracting the debit balance from the market value. By doing this calculation, you find that the equity in the account, which is the amount available after satisfying the debt, is $1 million (market value) minus $600,000 (debit balance), resulting in $400,000.

This equity amount reflects the portion of the account that is not subject to any borrowing, and thus it represents the effective coverage or available amount that can be taken into consideration.

In summary, the coverage provided for the account is $400,000, which represents the net equity, after accounting for the amount owed.