Sigmund has just been approved by Quality Investment Dealer for a margin account. He now wants to buy some shares of Wacky Inc. because he thinks the company has great long-term prospects. Sigmund's investment advisor tells him that the current price of Wacky Inc.'s shares is $1.60 and the maximum loan value that Quality will allow for this investment is 20% of market value. What is Sigmund's margin requirement?

Sigmund will have to invest $1.28/share and Quality will loan Sigmund $0.32/share

Sigmund will have to invest $0.32/share and Quality will loan Sigmund $1.28/share

Sigmund will have to deposit the full price of the purchase into his account plus an additional 20%

Sigmund will qualify for a 20% discount off the current market price of the shares