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Q1: You purchased 1000 shares of stock for $55.30 a share. The initial margin requirement is 70 percent and the maintenance margin is 35 percent.
Q1: You purchased 1000 shares of stock for $55.30 a share. The initial margin requirement is 70 percent and the maintenance margin is 35 percent. What is the maximum percentage decrease that can occur in the stock price before you receive a margin call?
Q2:
You own a call option. Stock price of the underlying asset is continuously changing and you closely follow the price changes. Today you were very happy since youve earned a handsome profit on your call option. Under this scenario, what happened to the stock price?
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