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You have borrowed $20,000 on margin to buy shares in Harley Davidson, which is now trading for $40 per share. Your account starts with an
You have borrowed $20,000 on margin to buy shares in Harley Davidson, which is now trading for $40 per share. Your account starts with an initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price falls to $35 per share.
What is your new margin percentage? Will you receive a margin call?
Exactly how low can the price of Disney shares fall before you receive a margin call?
Please show how you got your answer
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