Question
You purchased 400 shares of ABC common stock on margin at $50 per share. Assume the initial margin is 50% and the maintenance margin is
You purchased 400 shares of ABC common stock on margin at $50 per share. Assume the initial margin is 50% and the maintenance margin is 30%.
a) What will be your rate of return if the price of ABC becomes $40 next year? b) How far does the price of ABC stock have to fall for you to get a margin call?
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Intermediate Financial Management
Authors: Eugene F. Brigham, Louis C. Gapenski
4th Edition
0030754828, 978-0030754821
