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Assume that the investor chooses to hold stock A longer. The investor has a margin account, where the maintenance margin is 30%, initial margin is
Assume that the investor chooses to hold stock A longer. The investor has a margin account, where the maintenance margin is 30%, initial margin is 45%. Suppose that the price of the stock then declines by 10%. a) Would the account then be restricted? Explain your answer and what that would mean. (3 marks) b) Does your account require a margin call if not, then at what price would a margin call be required? If YES move on to part C (2 marks here or at c) c) If your account now requires margin call then how much cash would you need to add?
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