Assume an initial margin requirement of 50 percent and a maintenance margin of 30 percent. If you
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Question:
Assume an initial margin requirement of 50 percent and a maintenance margin of 30 percent. If you buy 100 shares of stock on margin at $60 per share and the price of the stock subsequently drops to $50.
i). What is the actual margin at $50?
ii) The price now rises to $55. Is the account restricted?
iii) If the price drops to $49, is there a margin call?
iv) Assume that the price declines to $45. What is the amount of margin call? At $35?
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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