Question
You deposit $100,000 cash in a brokerage account and short sell $200,000 of stocks on margin. Later, the value of the stocks held short rises
a. 20 percent
b. 25 percent
C. 33 percent
d. 50 percent
9. Margin Calls (LO3, CFA4) You deposit $100,000 cash in a brokerage account and purchase $200,000 of stocks on margin by borrowing $100,000 from your broker, who requires a maintenance margin of 30 percent. Which of the following is the largest value for your stock holdings for which you will still receive a margin call?
a. $200,000
b. $160,000
c. $140,000
d. $120,000
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Get StartedRecommended Textbook for
Fundamentals of Financial Management
Authors: Eugene F. Brigham, Joel F. Houston
15th edition
1337671002, 978-1337395250
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