Question
she wants to buy a stock, which is selling for $5 per share. She can buy on margin. The initial margin requirement is 40%, and
she wants to buy a stock, which is selling for $5 per share. She can buy on
margin. The initial margin requirement is 40%, and the maintenance margin is 30%.
If the price decreases to $3:5, will she receive a margin call? If she does
receive a margin call, but she does nothing.
Then how many shares should the broker sell to keep the margin above the main-
tenance margin?
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Fundamentals Of Financial Management Concise
Authors: Eugene F. Brigham, Joel F. Houston
11th Edition
0357517717, 9780357517710
