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John James has $500,000 of Apple stock in his brokerage account. His account has no debt. Apple stock is currently selling at $1,000 per share.
- John James has $500,000 of Apple stock in his brokerage account. His account has no debt. Apple stock is currently selling at $1,000 per share. The following information applies:
IMR = 50% MMR = 30% (house requirement)
- He has decided to take out a margin loan using Apple Stock as collateral. What is the most he can borrow from his margin account? Show the balance sheet of the account after the transaction.
- Suppose the falls to $800 per share. What is his Percentage Margin?
- By what percentage would the price have to fall for John to be subject to a margin call?
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Victorian Literature And Finance
Authors: Francis O'Gorman
1st Edition
0199281920, 978-0199281923
