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Suppose you want to purchase 750 shares of Pepsi stock on margin. Stock price is $170 per share. Your brokerage firm has an initial margin
Suppose you want to purchase 750 shares of Pepsi stock on margin. Stock price is $170 per share. Your brokerage firm has an initial margin of 55% and maintenance margin of 35%. Assume this is the only position in your brokerage account.
1)If Pepsis stock price becomes $200, will there be a margin call? Explain or show work.
2)If Pepsis stock price becomes $150, will there be a margin call? Explain or show work.
3)At what stock price will a margin call be triggered for Pepsi? Show all work.
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