Question
Customer X opened a margin account at a local brokerage firm. Xs initial investment was to purchase 200 shares of MGROS on margin at 40
Customer X opened a margin account at a local brokerage firm. Xs initial investment was to purchase 200 shares of MGROS on margin at 40 TL per share. X borrowed 4,000TL from broker to complete the purchase.
A) At the time of the purchase, what was the actual margin in Xs account?
B) If MGROS Stock subsequently rises in price to 60TL per share, what is the actual margin in Xs account?
C) If MGROS Stock subsequently falls in price to 30TL per share, what is the actual margin in Xs account?
D) If X was to short sells 500 shares of MGROS at 40TL per share. The initial margin and maintenance margin requirement is 40%. To what price can the stock rise before X receives a margin call?
I would be glad if you explain it step by step in your own words in detail. especially with how the transactions are and the calculations of the transactions, thank you in advance.
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