Question
A client buys 5,000 shares of listed ABC Company on margin when it sells for $2.25 per share (not eligible for reduced margin). How much
A client buys 5,000 shares of listed ABC Company on margin when it sells for $2.25 per share (not eligible for reduced margin).
How much would the investor have to put up as margin?
Assume the price of ABC's shares declines to $1.85. Will the investor get a margin call? If so, how much?
Assume that the price of ABC's shares - instead of declining from $2.25 to $1.85 - had increased from $2.25 to $2.75. What amount must be added to, or can be withdrawn from, the account.
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a The initial margin requirement is the amount the investor has to put up initially to purchase the ...
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Foundations of Financial Management
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
10th Canadian edition
1259261018, 1259261015, 978-1259024979
