Assume an initial margin requirement of 50 percent and a maintenance margin of 30 percent. An investor

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Assume an initial margin requirement of 50 percent and a maintenance margin of 30 percent. An investor buys 100 shares of stock on margin at $60 per share. The price of the stock subsequently drops to $50.

a. What is the actual margin at $50?

b. The price now rises to $55. Is the account restricted?

c. If the price declines to $49, is there a margin call?

d. Assume that the price declines to $45. What is the amount of the margin call? At $35?

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Investments Analysis And Management

ISBN: 9781118975589

13th Edition

Authors: Charles P. Jones, Gerald R. Jensen

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Question Posted: Dec 24, 2023 01:49 AM

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Assume an initial margin requirement of 50 percent and a maintenance margin of 30 percent. An investor

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The initial margin is 50 of 6000 or 3000 The other 3000 is borr...View the full answer

Investments Analysis And Management

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