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The current price of a stock is $50 per share. You have $20,000 to invest. You borrow an additional $20,000 from your broker and invest
The current price of a stock is $50 per share. You have $20,000 to invest. You borrow an additional $20,000 from your broker and invest $40,000 on the stock. If the maintenance margin is 30 percent, at what price will a margin call first occur? Suppose you pay 4% interest on the amount borrowed from the broker.
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