Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

An investor opens a margin account with an initial deposit of $ 5 7 0 0 . He then purchases 4 5 0 shares of

An investor opens a margin account with an initial deposit of $5700. He then purchases 450 shares of a stock at $38. His margin account has a maintenance margin requirement of 30%. Ignoring commissions and interest, IF the price changed to 48WHAT IS YOUR NEW EQUITYAT WHAT PRICE YOU WILL GET A MARGIN CALL PRICE?

Step by Step Solution

3.38 Rating (160 Votes )

There are 3 Steps involved in it

Step: 1

To calculate the new equity and determine the price at which you will get a margin call we first nee... 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

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

More Books

Students also viewed these Finance questions

Question

( 2 x 2 + 2 y ) dx + ( 2 x 4 y 4 ) dy = 0

Answered: 1 week ago

Question

Describe the typical terrorist cell.

Answered: 1 week ago

Question

1. Administrative routines, such as taking attendance

Answered: 1 week ago