A qualified investor is looking to buy stocks on a margin.

The current stock price is

The investor is buying

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Today TO

Initial Stock Price

Initial Margin

Maintenance Margin

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Calculate the value of holdings, amount borrowed and equity

Value of holdings

Amount Borrowed

Equity

In $3$ months the value of the stock drops to $$\frac{75}{?}$ share

T$1$

New stock price

Value of holdings

Amount Borrowed

Equity

Margin$\%$

Does the investor get a margin call?

At what value margin call?

At what price would a margin call?

In another $3$ months the value of the stock drops to $$70/$share

T$2$ What if stock falls to

Value of holdings

Amount Borrowed

Equity

Margin$\%$

Gets Margin call

Value of holdings

$$

New

Amount Borrowed

New

Equity

Difference

Assuming in $1$ year, the interest rate on margin is:

A qualified investor is looking tosell stocks short.

The current stock price is

The investor is selling short

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