Answered step by step
Verified Expert Solution
Question
1 Approved Answer
1. Suppose that a buying on margin account has a 50% initial margin and 40% maintenance margin, If the stock price is $100, a 60,000
1. Suppose that a buying on margin account has a 50% initial margin and 40% maintenance margin, If the stock price is $100, a 60,000 deposit buys 600 shares, where borrowed amount is 30,000 and Equity Capital is 30,000. How far can the stock price fall before there is a margin call:
A. 83.33
B. 166.67
C.116.67
D. 33.33
Please help me out with this question. I need to know how to solve out.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started