You borrowed $38176 six months ago at 8.7% EAR to finance the purchase of $84569 of stock.
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Question:
You borrowed $38176 six months ago at 8.7% EAR to finance the purchase of $84569 of stock. Assuming your maintenance margin requirement is 10% and that interest is computed on the loan daily (but paid only when the position closes), how much can the stock price decline (%) from your purchase price before triggering a margin call?
Related Book For
Introduction To Derivatives And Risk Management
ISBN: 9781305104969
10th Edition
Authors: Don M. Chance, Robert Brooks
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