Question
You invested in 800 shares of stock for $49.20 a share. The initial margin requirement is 65 percent and the maintenance margin is 35 percent.
You invested in 800 shares of stock for $49.20 a share. The initial margin requirement is 65 percent and the maintenance margin is 35 percent.
What is the lowest the stock price can go before you receive a margin call?
What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 100%?
What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 0%?
How would your answers to the three questions above change if you invested in 8000 shares instead of 800 shares?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
To answer these questions well first calculate the amount of equity in the account and then determine the stock price at which the equity falls below ...
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Step: 2
Step: 3
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Investments Analysis and Management
Authors: Charles P. Jones
12th edition
978-1118475904, 1118475909, 1118363299, 978-1118363294
