A trader purchases 300 shares of stock at $40 per share. She borrows $4,000 from her...

 

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A trader purchases 300 shares of stock at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The maintenance margin requirement is 30%. a) If the share price next day falls to $30, will she receive a margin call? b) In what range of stock price of S will she receive a margin call? A trader purchases 300 shares of stock at $40 per share. She borrows $4,000 from her broker to help pay for the purchase. The maintenance margin requirement is 30%. a) If the share price next day falls to $30, will she receive a margin call? b) In what range of stock price of S will she receive a margin call?

Answer rating: 100% (QA)

Margin Call Analysis Background Shares purchased 300 Price per share 40 Total cost 300 shares 40shar... View the full answer