Question
Calculating Margin Using the Information in Problem 1, construct your equity account balance sheet at the time of your purchase. What does your balance sheet
Calculating Margin Using the Information in Problem 1, construct your equity account balance sheet at the time of your purchase. What does your balance sheet look like if the share price rises to $24? What if it falls to $14 per share? What is your margin in both cases? Round the number of shares down to the nearest number of whole shares. Problem 1: Carson Corporation stock sells for $17 per share, and youve decided to purchase as many possible shares as you possibly can. You have $31,000 available to invest. What is the maximum number of shares you can buy if the initial margin is 60 percent?
Maximum Investment=$31,000/0.60=$51,667
Number of shares= $51,667/$17per share= 3,039 shares
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