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You've borrowed $9,000 on margin account to buy Ultra Inc. shares trading at $50 per share. Your account starts at initial margin requirement of 55%.
You've borrowed $9,000 on margin account to buy Ultra Inc. shares trading at $50 per share. Your account starts at initial margin requirement of 55%. The maintenance margin is 35%. A week later, stock price falls to $45 per share. a. Will you receive a margin call? Explain why. b. How low can the price of Ultra shares fall before you receive a margin call
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