Question
URGENT! In 20 mins please! Please no need to solve and dont show the working, please just tell quickly if answer is A, B, C
URGENT! In 20 mins please! Please no need to solve and dont show the working, please just tell quickly if answer is A, B, C or D ASAP! JUST ANSWER THE OPTION! Thank you in advance!
An investor buys $20,000 worth of a stock priced at $20 per share using 60% initial margin. The broker requires a 35% maintenance margin. What is the price of the stock when the investor receives a marginal call? (Assume the stock pays no dividends, and ignore interest on the margin loan.)
A. Assume that the investor receives a marginal call when the price is p. The margin account has 1000 shares. Solve the equation (20,000*60%-1000 * (20-p))/(1000 * p) = 35% for p.
B. Assume that the investor receives a marginal call when the price is p. The margin account has 1000 shares. Solve the equation (20,000*60%-1000 * (20-p))/(20,000*60%) = 35% for p.
C. Assume that the investor receives a marginal call when the price is p. The margin account has 1000 shares. Solve the equation (20,000*60%-1000 * p)/(1000 * p) = 35% for p.
D. Assume that the investor receives a marginal call when the price is p. The margin account has 1000 shares. Solve the equation (20,000*60%-1000 * p)/(20,000*60%) = 35% for p.
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