P2.5 Jerri Kingston bought 1000 shares at $8 per share using a margin loan to finance 40%
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P2.5 Jerri Kingston bought 1000 shares at $8 per share using a margin loan to finance 40% of the purchase. Given the lender’s maximum loan to value ratio is 75%, how far does the share price have to drop before Jerri faces a margin call? (Assume there are no other securities forming part of the margin loan.)
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Related Book For 
Fundamentals Of Investing
ISBN: 9781442532885
3rd Edition
Authors: Lawrence J. Gitman, Michael D. Joehnk, Scott Smart, Roger Juchau, Donald Ross, Sue Wright
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