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Nancy purchased $80,000 worth of common stock by borrowing $32,000 from her broker. She paid the rest to satisfy the initial margin requirement. The initial
Nancy purchased $80,000 worth of common stock by borrowing $32,000 from her broker. She paid the rest to satisfy the initial margin requirement. The initial stock price is $160 per share. The maintenance margin requirement is 45%. The broker charges 8% on the margin loan. If the stock price changes from $160 to $120 one year later, will Nancy receive a margin call at this price?
A. | Yes, Nancy will receive a margin call at this price. | |
B. | No, Nancy will not receive a margin call at this price. |
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