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Suppose you want to buy 400 shares of Starbucks (SBUX) at $75 per share. Initial margin requirement is 65%. Call money rate plus the spread
Suppose you want to buy 400 shares of Starbucks (SBUX) at $75 per share. Initial margin requirement is 65%. Call money rate plus the spread is 7%. You supplied cash just to meet the initial margin requirement and invested the rest on margin.
How much did you supply and how much did you borrow?
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