PART 2 - Buying Stock on Margin (12 Marks) Background *MARGIN ACCOUNTS-A margin account is a type of investment account whic allows you to borrow money from your Broker to pay for new purchase for tr account. In such cases, the client pays only a portion of the purchase price ar the investment dealer lends the balance of the purchase price to the client. Interest is charged on the loan. "NOTE: The word MARGIN refers to the amount of funds the investor must personally provide. The broker lends the remainder to the investor. The maximum loan from the broker is up to 50% of the current market value o the borrowed shares. As the current value of the shares changes each day, so does the maximum loa amount: Question-Determining the Amount of the Margin Call Let's assume 2 months later there is a decrease in the price of the shares to $22 per share. REQUIRED: (4 Marks) Now that the share price has fallen to $22 per share, what is the maximum amount that the dealer can lend your client