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4 , Suppose you have a margin account with a broker which requires the value of your equity in your account to be at least
Suppose you have a margin account with a broker which requires the value of your equity in your account to be at least of total account value. You have $ to invest. You borrow $ on the margin and buy shares of XYZ for $ at $ a share.
After your purchase the price of XYZ has fallen to $ after days. On the st day, the price rapidly declines to $
You get a margin call from your broker, but instead of depositing more cash into your account, you ask the broker to liquidate part of your holdings of XYZ to meet margin requirements. What dollar value of shares will the brokers sell?
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