Question
On January 1, 2018, an investor is considering buying 120 shares of MUFC, which current price is $45 per share. The investor sets a margin
On January 1, 2018, an investor is considering buying 120 shares of MUFC, which current price is $45 per share. The investor sets a margin of 50% and assumes that there are no brokerage costs. Later, on January 1, 2019, due to a very good first half of the premier league season, the stock rises to $55 per share. If a minimum maintenance margin of 30% is put in place, calculate the margin percentage and show whether the investor would have excess equity, would be restricted, or would be subject to a margin call when the stock price takes the following value:
40
65
30
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