Q3. Margin calculations.

a) A client buys 5,000 shares of listed ABC Company on margin when it sells for $2.25 per share

(not eligible for reduced margin). How much would the investor have to put up as margin?

b) Assume the price of ABC's shares declines to $1.85. Will the investor get a margin call?

If so, how much?

c)Assume that the price of ABC's shares - instead of declining from $2.25 to $1.85 - had

increased from $2.25 to $2.75. What amount must be added to, or can be withdrawn from, the

account.