Question
The margin requirement on a stock purchase is 50%, and the maintenance margin requirement is 30%. You fully use the margin allowed to purchase 1,000
The margin requirement on a stock purchase is 50%, and the maintenance margin requirement is 30%. You fully use the margin allowed to purchase 1,000 shares of JPM at $60. Assume there are no dividends and that the interest rate on the margin loan is 5%. If one year has passed, what share price for JPM could trigger a margin call?
A. $42.86 B. $45.00 C. $48.00 D. $48.33
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Global Corporate Finance A Focused Approach
Authors: Kenneth A. Kim
1st Edition
9814335827, 9789814335829
