Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4. Youve borrowed $20,000 on margin to buy shares in Ixnay, which is now selling at $40 per share. You invest 1,000 shares. Your account

4. Youve borrowed $20,000 on margin to buy shares in Ixnay, which is now selling at $40 per share. You invest 1,000 shares. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price changes to $35 per share. At what price will you receive a margin call? (Round your answer to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Derivatives And Risk Management

Authors: Robert Brooks, Don M Chance

9th Edition

1133190197, 978-1133190196

More Books

Students also viewed these Finance questions

Question

=+2. What do they like better about its competition?

Answered: 1 week ago

Question

=+a. What kind of personality does the brand have?

Answered: 1 week ago