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Series 28 study materials
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Series 28 practice questions

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Question 1Financial Reporting

A broker-dealer carries customer accounts and computes a customer reserve requirement. How frequently must it file a FOCUS Report Part II with its designated examining authority, and by when?

  1. Quarterly, within 30 calendar days after the quarter end
  2. Semiannually, within 10 business days after the period end
  3. Annually, within 60 calendar days after the fiscal year end
  4. Monthly, within 17 business days after the month end Correct answer.

Explanation

A carrying broker-dealer files Part II of Form X-17A-5 monthly, no later than 17 business days after the close of each month. The annual audited report is a separate filing made within 60 days of the fiscal year end.

Question 2Financial Reporting

What is the minimum net capital requirement for a broker-dealer that carries customer accounts or holds customer funds?

  1. $250,000 Correct answer.
  2. $50,000
  3. $5,000
  4. $500,000

Explanation

Rule 15c3-1 requires a broker-dealer that carries customer accounts or holds customer funds to maintain minimum net capital of $250,000. That figure is also the floor for a firm electing the alternative standard.

Question 3Financial Reporting

Under Rule 17a-4, how long must a broker-dealer retain its books and records, and how must they be stored?

  1. Three years, the first year in an accessible place
  2. Six years, all six years in an accessible place
  3. Five years, the first three in an accessible place
  4. Six years, the first two in an accessible place Correct answer.

Explanation

Rule 17a-4 generally requires preservation of books and records for six years, with the first two years maintained in an easily accessible place. Records must be available for examination by regulators throughout the retention period.

Question 4Financial Reporting

A broker-dealer has a December 31 fiscal year end. By when must its audited financial statements be filed under Rule 17a-5(d)?

  1. Within 30 days after the fiscal year end
  2. Within 90 days after the fiscal year end
  3. Within 60 days after the fiscal year end Correct answer.
  4. Within 45 days after the fiscal year end

Explanation

Rule 17a-5(d) requires the annual audited financial report and the accountant's report to be filed within 60 days after the close of the fiscal year. The filing goes to the SEC and to the firm's designated examining authority.

Question 5Financial Reporting

In computing net capital, which of the following is treated as a non-allowable asset?

  1. Cash held at a Federal Reserve member bank
  2. Receivables from other broker-dealers
  3. US Treasury bills maturing in 60 days
  4. Prepaid rent covering the next twelve months Correct answer.

Explanation

Non-allowable assets are deducted in full from net worth because they cannot be readily converted to cash to satisfy customer claims. Prepaid expenses have no realizable value to customers and are therefore deducted in full.

Question 6Financial Reporting

For financial reporting purposes, a broker-dealer records a customer's securities purchase on which date?

  1. The settlement date
  2. The date the customer pays in full
  3. The trade date Correct answer.
  4. The date the confirmation is mailed

Explanation

Broker-dealers use trade-date accounting, recognizing the purchase or sale and the related receivable or payable when the trade is executed. Settlement-date accounting would misstate the firm's positions and obligations during the settlement cycle.

Question 7Financial Reporting

Under the customer protection rule, customer funds required to be set aside must be deposited into which type of account?

  1. A special reserve account held for the benefit of customers Correct answer.
  2. A trust account held by the firm's outside counsel
  3. A general operating account at any federally insured bank
  4. A margin account at a registered clearing agency

Explanation

Rule 15c3-3 requires the deposit of required customer funds into a special reserve bank account for the exclusive benefit of customers at a bank that is a member of the Federal Reserve System. The account may not be used for the firm's own obligations.

Question 8Financial Reporting

What is the standard net capital haircut applied to a long position in listed common stock?

  1. 15% of market value Correct answer.
  2. 10% of market value
  3. No haircut is applied
  4. 5% of market value

Explanation

The net capital rule assigns a 15% haircut to long and short positions in common stock to reflect market risk. The haircut reduces the credit given to the position when computing net capital.

Question 9Financial Reporting

A broker-dealer reports net worth of $500,000, an approved subordinated loan of $100,000, non-allowable assets of $80,000, and securities haircuts of $70,000. What is its net capital?

  1. $380,000
  2. $450,000 Correct answer.
  3. $600,000
  4. $520,000

Explanation

Net capital equals net worth plus qualifying subordinated borrowings, less non-allowable assets and haircuts: $500,000 + $100,000 - $80,000 - $70,000 = $450,000. Each adjustment reflects amounts that cannot be counted as liquid capital.

Question 10Financial Reporting

A broker-dealer using the aggregate indebtedness standard has aggregate indebtedness of $1,800,000 and net capital of $110,000. Is the firm in compliance with the ratio requirement?

  1. Yes, because net capital of $110,000 exceeds the $100,000 minimum
  2. No, because the ratio of about 16.4 to 1 exceeds the 15 to 1 limit Correct answer.
  3. Yes, because the aggregate indebtedness standard does not apply to this firm
  4. Yes, because the ratio is below 20 to 1

Explanation

Under the aggregate indebtedness standard, a firm's aggregate indebtedness may not exceed 15 times its net capital. Dividing $1,800,000 by $110,000 produces about 16.4 to 1, which exceeds the limit and is a net capital violation.

Question 11Financial Reporting

A firm's minimum net capital requirement is $250,000 and its actual net capital is $280,000. Which statement is correct?

  1. A notice is due within 5 business days after the month end
  2. A notice is due within 24 hours of falling under 120% of the minimum Correct answer.
  3. No filing is needed, because net capital exceeds the required minimum
  4. The firm must immediately cease conducting a securities business

Explanation

The early warning level is 120% of the required minimum, which here is $300,000. Because net capital of $280,000 is below that level, the firm must give notice under Rule 17a-11 within 24 hours even though it is still above the absolute minimum.

Question 12Financial Reporting

A broker-dealer computes its customer reserve requirement as of the close of business on Friday. By when must the required deposit be made into the reserve bank account?

  1. The fifth business day after the computation date
  2. The next business day after the computation date
  3. The second business day after the computation date Correct answer.
  4. The last business day of the calendar month

Explanation

Rule 15c3-3 requires the weekly computation to be made as of the close of the last business day of the week, with the deposit made no later than the second business day after the computation date. That timing normally places the deposit on Wednesday.

Question 13Financial Reporting

For a subordinated loan to count toward a broker-dealer's net capital, the subordination agreement must be:

  1. Disclosed in the annual report to shareholders
  2. Certified by an independent public accountant
  3. Approved in writing by the designated examining authority Correct answer.
  4. Recorded only in the firm's minute book

Explanation

A loan qualifies as equity capital only if it is covered by a satisfactory subordination agreement that has been submitted to and approved in writing by the firm's designated examining authority. Without that approval, the borrowing is treated as a liability rather than capital.

Question 14Financial Reporting

Which of the following is included in a broker-dealer's aggregate indebtedness?

  1. The firm's outstanding capital stock
  2. Subordinated borrowings with more than a year to maturity
  3. An unsecured bank line of credit drawn to $200,000 Correct answer.
  4. Furniture and equipment carried at cost

Explanation

Aggregate indebtedness captures the firm's unsubordinated money obligations, including drawn bank borrowings. Long-term subordinated debt is excluded because it is treated as capital, and equity and fixed assets are not liabilities at all.

Question 15Financial Reporting

A broker-dealer that elects the alternative net capital standard is subject to a minimum requirement of:

  1. 2% of aggregate debit items, with a $250,000 floor Correct answer.
  2. 15 times aggregate indebtedness
  3. 3% of customer free credit balances
  4. 1% of total assets under custody

Explanation

Under the alternative standard, required net capital is 2% of aggregate debit items computed in the customer reserve formula, subject to the $250,000 minimum. The 15-to-1 ratio belongs to the aggregate indebtedness standard.

Question 16Financial Reporting

Which statement must appear in the annual audited financial report of a broker-dealer that has subordinated borrowings?

  1. A statement of the firm's advertising expenses
  2. A statement of changes in liabilities subordinated to general creditors Correct answer.
  3. A listing of all registered representatives
  4. A schedule of each customer's account balance

Explanation

Rule 17a-5(d) specifies the financial statements that must be included, one of which is a statement of changes in liabilities subordinated to claims of general creditors. This statement lets regulators track capital that depends on subordination agreements.

Question 17Financial Reporting

The independent public accountant who audits a broker-dealer's financial statements must be:

  1. Selected by the firm's audit committee each year
  2. Licensed by the state banking department
  3. A member firm of FINRA in good standing
  4. Registered with the PCAOB and subject to its inspection Correct answer.

Explanation

Rule 17a-5 requires the audit to be performed by an independent public accountant that is registered with the Public Company Accounting Oversight Board and subject to its inspection. Independence must also be maintained from the broker-dealer.

Question 18Financial Reporting

Under Rule 17a-4, how long must a broker-dealer preserve business-related correspondence and communications?

  1. Six years, with the first two in an accessible place
  2. Three years, with the first two in an accessible place Correct answer.
  3. Two years, with the first year in an accessible place
  4. Five years, with the first three in an accessible place

Explanation

Communications relating to the firm's business must be preserved for at least three years, with the first two years in an easily accessible place. The longer six-year period applies to core records such as blotters and ledgers.

Question 19Financial Reporting

Customer free credit balances held by a broker-dealer are:

  1. Segregated in full at all times and never subject to a haircut
  2. Recorded as a firm asset until the customer asks for payment
  3. Payable on demand and counted as credits in the reserve formula Correct answer.
  4. Excluded from the reserve computation because they are customer property

Explanation

Free credit balances are funds the customer may withdraw on demand, so they are customer property for which the firm must hold protection. They enter the reserve formula as credits, which generally increase the amount the firm must deposit.

Question 20Financial Reporting

The net capital rule requires a broker-dealer to maintain its minimum net capital:

  1. Only when new customer accounts are opened
  2. Only on the monthly FOCUS report date
  3. At all times throughout the year Correct answer.
  4. Only at the end of each fiscal quarter

Explanation

Compliance with the net capital rule is a continuous obligation, not a periodic one. A firm must be above its minimum at every moment, which is why intra-month shortfalls must be reported even when month-end figures look adequate.

Question 21Financial Reporting

A broker-dealer's customer reserve computation shows total customer debits of $4,000,000 and total customer credits of $3,300,000. What amount must be on deposit in the reserve bank account?

  1. $3,300,000
  2. $4,000,000
  3. Zero, because credits are less than debits
  4. $700,000 Correct answer.

Explanation

The required deposit is the excess of total credits over total debits in the reserve formula: $3,300,000 - $4,000,000 produces a requirement of $700,000 because credits exceed debits. The deposit is the amount needed to protect customer property still owed to customers.

Question 22Financial Reporting

A broker-dealer holds a long position in a single equity security whose market value equals 25% of the firm's net capital. What does the net capital rule require?

  1. Immediate liquidation of the position down to 25% of net capital
  2. An added haircut on the excess over 10% of net capital Correct answer.
  3. No adjustment, because the position is fully paid for
  4. The entire position to be treated as a non-allowable asset

Explanation

The undue concentration rule applies an additional haircut to the portion of a position in one security that exceeds 10% of the firm's net capital. The purpose is to penalize excessive exposure to a single issuer.

Question 23Financial Reporting

A subordinated loan made to a broker-dealer has eight months remaining until maturity. For net capital purposes the loan is:

  1. Excluded from net capital because less than a year remains Correct answer.
  2. Counted in full as equity capital
  3. Treated as aggregate indebtedness until it matures
  4. Applied as a haircut against the firm's securities positions

Explanation

Subordinated debt counts as equity capital only while at least one year remains on the subordination agreement. Once the remaining term falls under a year, the loan can no longer be relied on and is excluded from net capital.

Question 24Financial Reporting

A broker-dealer determines that its net capital has fallen below the required minimum. What must the firm do?

  1. Continue operations normally and report the shortfall on the next FOCUS filing
  2. Notify the SEC and its examining authority and stop expanding its business Correct answer.
  3. Await the annual audit so the accountant can verify the shortfall first
  4. Recalculate its requirement using the alternative standard without notifying anyone

Explanation

A net capital deficiency triggers an immediate notice obligation to the SEC and the designated examining authority, and the firm may not expand its business or withdraw capital without permission. Regulators must learn of the shortfall right away because customer assets may be at risk.

Question 25Financial Reporting

An independent accountant performing the annual audit identifies a material inadequacy in the broker-dealer's internal accounting controls. The accountant must:

  1. Withhold the audit report until the firm corrects the problem
  2. Report the inadequacy to the designated examining authority Correct answer.
  3. Disclose the inadequacy only to the firm's board of directors
  4. Invoice the firm for the additional audit procedures performed

Explanation

Rule 17a-5 requires the accountant to report material inadequacies in internal accounting controls to the designated examining authority. The report cannot be limited to firm management or the board because regulators rely on it.

Question 26Financial Reporting

A broker-dealer files a monthly report with the SEC on Form X-17A-5. Which filing is due within 17 business days after each calendar month-end?

  1. Part IIA, the quarterly FOCUS report
  2. Part I, the annual audited report
  3. Part II, the monthly FOCUS report Correct answer.
  4. Part III, the risk assessment report

Explanation

SEC Rule 17a-5 requires the monthly FOCUS report, Form X-17A-5 Part II, to be filed within 17 business days after each calendar month-end. Part IIA is the quarterly filing, while the annual audited report follows a different deadline.

Question 27Financial Reporting

A broker-dealer's fiscal year ends on December 31. By when must it file its annual audited financial statements with the SEC?

  1. 17 business days after the fiscal year end
  2. 90 calendar days after the fiscal year end
  3. 60 calendar days after the fiscal year end Correct answer.
  4. 120 calendar days after the fiscal year end

Explanation

Rule 17a-5 requires a broker-dealer's annual audited financial statements to be filed within 60 calendar days after its fiscal year end. The filing is made with the SEC and the designated examining authority.

Question 28Financial Reporting

Under SEC recordkeeping rules, how frequently must a broker-dealer count the securities it holds, including customer securities?

  1. Annually
  2. Monthly
  3. Weekly
  4. Quarterly Correct answer.

Explanation

Rule 17a-13 requires a broker-dealer to count all securities held, including customer securities, at least once each calendar quarter. The rule also requires an annual count conducted without prior notice to employees.

Question 29Financial Reporting

Under the net capital rule, a broker-dealer using the aggregate indebtedness standard must keep its aggregate indebtedness within what maximum ratio to net capital?

  1. 8 to 1
  2. 12 to 1
  3. 5 to 1
  4. 15 to 1 Correct answer.

Explanation

Under the aggregate indebtedness standard, aggregate indebtedness may not exceed 15 times net capital, a 15-to-1 ratio. This ratio is sometimes expressed as 1,500%.

Question 30Financial Reporting

A broker-dealer determines that its net capital is below the minimum required by Rule 15c3-1. What action must the firm take?

  1. Notify only the firm's clearing broker of the deficiency
  2. Notify customers within 10 business days of the deficiency
  3. Notify the SEC and the examining authority within 24 hours Correct answer.
  4. Wait until the next monthly FOCUS report is filed and disclose the shortfall there

Explanation

Rule 15c3-1 requires a firm whose net capital falls below the minimum to notify the SEC and its designated examining authority promptly, with written confirmation within 24 hours. The firm may also face restrictions on continuing operations.

Question 31Financial Reporting

A broker-dealer's minimum net capital requirement is $250,000. At what net capital level does the early warning notification requirement begin?

  1. $275,000
  2. $250,000
  3. $300,000 Correct answer.
  4. $350,000

Explanation

The early warning threshold is net capital below 120% of the minimum requirement. Here, 120% of $250,000 is $300,000, so notification is triggered when net capital falls below $300,000.

Question 32Financial Reporting

Which schedule must accompany a broker-dealer's annual audited financial statements to show the relationship between the audited balance sheet and the net capital computation?

  1. A reconciliation of the net capital computation to the financial statements Correct answer.
  2. A listing of all customer complaints received by the firm during the year
  3. A schedule of employee compensation paid during the year
  4. A copy of the firm's customer account agreements

Explanation

The annual audited report must include a reconciliation between the audited financial statements and the net capital computation. This allows regulators to verify that the net capital figure ties to the audited balance sheet.

Question 33Financial Reporting

A broker-dealer files Form X-17A-5 Part IIA for a calendar quarter ending March 31. When is the filing due?

  1. Within 30 calendar days after the quarter end
  2. Within 17 business days after the quarter end Correct answer.
  3. Within 17 business days after the fiscal year end
  4. Within 45 calendar days after the quarter end

Explanation

Part IIA is the quarterly FOCUS report and is due within 17 business days after the end of the quarter. For a quarter ending March 31, the filing is due 17 business days later.

Question 34Financial Reporting

Which asset is treated as non-allowable and therefore deducted from net worth in the net capital computation?

  1. Cash in the firm's bank account
  2. Marketable securities held for trading
  3. Customer receivables that are fully secured
  4. Goodwill Correct answer.

Explanation

Goodwill is an intangible asset that is not readily convertible to cash, so it is non-allowable and deducted from net worth. Cash, marketable securities, and fully secured customer receivables are generally allowable assets.

Question 35Financial Reporting

A broker-dealer carries proprietary accounts of other brokers (PAB accounts). Which account must the firm maintain for those accounts?

  1. A securities segregation account for employee accounts
  2. A payroll withholding account for employee taxes
  3. A customer free credit balance account maintained for retail customers
  4. A special reserve bank account for PAB accounts Correct answer.

Explanation

Rule 15c3-3 requires a special reserve bank account for the exclusive benefit of proprietary accounts of brokers when a firm carries PAB accounts. This account is separate from the customer reserve account.

Question 36Financial Reporting

A broker-dealer's fiscal year ends on September 30. When must it file its SIPC-7 assessment with SIPC?

  1. Within 17 business days after fiscal year end
  2. Within 120 calendar days after fiscal year end
  3. Within 60 calendar days after fiscal year end Correct answer.
  4. Within 30 calendar days after fiscal year end

Explanation

A broker-dealer must file SIPC-7, the annual SIPC assessment, within 60 calendar days after its fiscal year end. This filing is separate from the SEC annual audited financial statement filing.

Question 37Financial Reporting

Under Rule 17a-4, how long must a broker-dealer preserve its blotters and records of original entry?

  1. Six months
  2. One year
  3. Three years Correct answer.
  4. Two years

Explanation

Rule 17a-4 requires blotters and records of original entry to be preserved for three years, with the first two years in an easily accessible place. Other categories of records have their own preservation periods.

Question 38Financial Reporting

A broker-dealer using the aggregate indebtedness standard has aggregate indebtedness of $1,500,000 and net capital of $120,000. Which statement is correct?

  1. The firm complies because its aggregate indebtedness is below $2,000,000
  2. The firm complies because its ratio is 12.5 to 1, below the 15 to 1 limit Correct answer.
  3. The firm is deficient because its ratio is 12.5 to 1, above the 12 to 1 limit
  4. The firm is deficient because net capital must equal aggregate indebtedness

Explanation

The aggregate indebtedness ratio is $1,500,000 divided by $120,000, which equals 12.5 to 1. Because 12.5 is below the 15-to-1 maximum, the firm meets the ratio test.

Question 39Financial Reporting

A firm's minimum net capital requirement is $200,000. Its net capital is $230,000. Which statement is correct?

  1. The firm must file an amended annual audited report
  2. Notify the SEC because net capital is below 120% of the minimum Correct answer.
  3. The firm must cease operations immediately
  4. No notification is required because net capital still exceeds the $200,000 minimum

Explanation

The early warning threshold is 120% of the minimum requirement, or $240,000 here. Net capital of $230,000 is below that threshold, so the firm must notify the SEC even though it remains above the $200,000 minimum.

Question 40Financial Reporting

A broker-dealer using the aggregate indebtedness standard has aggregate indebtedness of $4,500,000. What is its minimum net capital requirement?

  1. $275,000
  2. $300,000 Correct answer.
  3. $250,000
  4. $450,000

Explanation

Under the aggregate indebtedness standard, minimum net capital is the greater of $250,000 or 6 2/3% of aggregate indebtedness. Here, 6 2/3% of $4,500,000 is $300,000, which exceeds $250,000.

Question 41Net Capital

For a futures commission merchant, net capital is best described as which of the following?

  1. the market value of the securities the firm owns in its proprietary account
  2. current assets less liabilities with illiquid assets and haircuts removed Correct answer.
  3. cash and cash equivalents that the firm holds in its own bank accounts
  4. total assets less total liabilities taken directly from the balance sheet

Explanation

Net capital starts with current assets minus liabilities, then removes assets that cannot be readily converted to cash and applies percentage haircuts to securities positions. The result measures liquid capital available to meet customer and creditor obligations rather than book net worth.

Question 42Net Capital

Which of the following items is deducted in full when a firm computes its net capital?

  1. Prepaid rent covering the next twelve months Correct answer.
  2. A certificate of deposit maturing in 60 days
  3. Cash the firm holds in a segregated account that belongs to the firm
  4. Cash on deposit with a clearing organization as a performance bond

Explanation

Prepaid expenses represent money already spent for future benefits and cannot be turned into cash, so they are non-allowable assets deducted in full. Cash on deposit with a clearing organization and short-term certificates of deposit are readily convertible and remain allowable.

Question 43Net Capital

Under CFTC rules, an FCM must maintain net capital equal to the greater of $1,000,000 (as adjusted for inflation) or which of the following?

  1. 8% of segregated customer funds Correct answer.
  2. 10% of the firm's annual gross revenues
  3. 2% of the firm's total assets
  4. 15% of proprietary securities positions

Explanation

Rule 1.17 requires an FCM to maintain net capital of at least the greater of the dollar minimum or 8% of the customer funds it is required to segregate. The percentage component scales the requirement with the size of the customer business.

Question 44Net Capital

The minimum net capital requirement for an introducing broker is which of the following amounts?

  1. $40,000
  2. $10,000
  3. $25,000
  4. $45,000 Correct answer.

Explanation

Rule 1.17 requires every introducing broker to maintain adjusted net capital of at least $45,000, subject to adjustment for inflation. The 8% customer-fund component applies to FCMs, not to the IB minimum.

Question 45Net Capital

Because an FCM must hold net capital equal to at least 8% of customer segregated funds, each $1 of net capital supports how much in customer funds?

  1. $12.50 Correct answer.
  2. $20.00
  3. $25.00
  4. $8.00

Explanation

If net capital must equal 8% of customer funds, then customer funds may equal net capital divided by 0.08, or 12.5 times capital. This is the leverage the rule permits on the customer side of the business.

Question 46Net Capital

A firm wants to count a loan from its owner as part of its net capital. Which condition must the borrowing satisfy?

  1. The loan must be repayable on demand at any time the owner requests.
  2. The loan must be secured by a pledge of the firm's receivables.
  3. The loan must be covered by a subordination agreement. Correct answer.
  4. The loan must carry a market rate of interest and a fixed maturity.

Explanation

Borrowed money counts toward net capital only when a subordination agreement meeting Rule 1.17(h) makes those funds subordinate to the claims of customers and other creditors. Without proper subordination, the loan is an ordinary liability that reduces net capital.

Question 47Net Capital

Excess net capital is computed as which of the following?

  1. current assets minus current liabilities
  2. net capital plus subordinated debt
  3. customer segregated funds minus the firm's net capital balance
  4. net capital less the minimum requirement Correct answer.

Explanation

Excess net capital is the cushion above the regulatory floor: net capital minus the firm's minimum requirement, which itself is the greater of the dollar minimum or the percentage requirement. Excess net capital is the amount available to support new business or distributions.

Question 48Net Capital

A security that has no ready market is treated in the net capital computation by deducting what percentage of its value?

  1. 75%
  2. 15%
  3. 50%
  4. 100% Correct answer.

Explanation

Securities without a ready market cannot be liquidated at a predictable price, so they are classified as non-allowable and excluded entirely from net capital. Percentage haircuts such as 15% apply only to securities that can be sold readily.

Question 49Net Capital

An FCM carries $15,000,000 of customer funds required to be segregated and holds net capital of $1,300,000. Using a dollar minimum of $1,000,000, the firm's minimum net capital requirement is which of the following?

  1. $1,200,000 Correct answer.
  2. $2,250,000
  3. $1,000,000
  4. $1,300,000

Explanation

The percentage component is 8% of $15,000,000, or $1,200,000, which is larger than the $1,000,000 floor, so $1,200,000 is the requirement. The firm's actual capital of $1,300,000 gives it $100,000 of excess.

Question 50Net Capital

An FCM with $5,000,000 in customer segregated funds holds net capital of $950,000. Which statement about the firm is accurate?

  1. It is deficient because net capital is below $1,000,000. Correct answer.
  2. It is deficient because net capital is below 8% of customer funds.
  3. It is in compliance because net capital exceeds 8% of customer funds.
  4. It is in compliance because customer funds exceed net capital.

Explanation

The requirement is the greater of the $1,000,000 floor or 8% of $5,000,000, which is $400,000. Because the floor governs, $950,000 of net capital leaves the firm $50,000 short.