John just used $15,000 of cash plus a $6,000 margin loan to purchase $21,000 worth of Walmart (WMT) stock. This is the only transaction he has made in this account. What is his current account margin?

(2) You purchase 500 shares of stock on margin at a cost per share of $22. The initial margin requirement is 60%. The effective interest rate on the margin loan is 6.4%. How much interest will you pay if you repay the loan in four months?

(3) Tate Industries stock is selling for $16 a share. You would like to purchase as many shares of this stock as you can. Your margin account currently has available cash of $6,000 and the initial margin requirement is 75%. What is the maximum number of shares you can buy?

Answer rating: 100% (QA)

1 To calculate Johns current account margin we first need to determine the total value of the account John used 15000 of cash plus a 6000 margin loan ... View the full answer