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You purchased 1,000 shares of ABC common stock on margin at $45 per share. Assume the stock pays no dividend and no interest on margin
You purchased 1,000 shares of ABC common stock on margin at $45 per share. Assume the stock pays no dividend and no interest on margin is charged.
i) If the initial margin is 45%, what would the maintenance margin be if a margin call is made at a stock price of $30?
ii) What would be your rate of return if you sell the stock at $35 per share?
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