Problem 3-23

You've borrowed $23,000 on margin to buy shares in Disney, which is now selling at $46 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price falls to $41.60 per share.

a-1.	What is the percentage margin on the above transaction? (Round your answer to 2 decimal places.)

Percentage margin

%

a-2.

Will you receive a margin call?

	Yes
	No

b.	How low can the price of Disney shares fall before you receive a margin call? (Round your answer to 2 decimal places.)

Lowest price

$

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