Exclusion from Margin Stock Definition

B

According to the U.S. Federal Reserve Board's Regulation U, a margin stock is defined as any equity security that is traded on a national securities exchange or designated as a margin stock by the Board of Governors. This means that answer A, stock traded on a national securities exchange, is included in the definition of margin stock.

Answer B, nonmargin stock convertible to margin stock, is also included in the definition of margin stock. This is because nonmargin stock may become margin stock if the stock price increases or if the issuer of the stock decides to designate it as a margin stock.

Answer C, debt securities convertible to margin stock, is not included in the definition of margin stock. Margin requirements only apply to equity securities, not debt securities. Debt securities, such as bonds or notes, are not considered margin stock, even if they are convertible into equity securities.

Answer D, warrants to purchase margin stock, are included in the definition of margin stock. This is because warrants are derivative securities that provide the holder with the right to purchase the underlying security at a certain price. If the underlying security is a margin stock, then the warrants to purchase that stock are also considered margin stock.

In summary, the answer to the question is C - debt securities convertible to margin stock - as they are not included in the definition of margin stock.