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Q1) You pay $4,000 for the purchase of $10,000 worth of stock (100 shares at $100 per share), borrowing the remaining $6,000 from a broker.
Q1) You pay $4,000 for the purchase of $10,000 worth of stock (100 shares at $100 per share), borrowing the remaining $6,000 from a broker. Assets Value of stocks $10,000 Liabilities and equity Loan from a broker $6,000 Equity $4,000 (1) Calculate the initial margin (%) from the table above. (2) The minimum maintenance margin required by the broker is 20%. How low can the price of shares fall before you receive a margin call from the broker? (3) If you want to limit your loss resulting from the weak stock markets, should you place "market sell order" or "stop loss order" or "stop buy order
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