Question: Example 3.2 Maintenance Margin Continuing the scenario presented in Example 3.1, suppose the maintenance margin is 30%, How far could the stock price fall before

Example 3.2 Maintenance Margin Continuing the scenario presented in Example 3.1, suppose the maintenance margin is 30%, How far could the stock price fall before the investor would get a margin call? Let P be the price of the stock. The value of the investor's 100 shares is then 100P, and the equity in the account is 100P - $4,000. The percentage margin is (100P - $4,000y100P. The price at which the percentage margin equals the maintenance margin of 3 is found by solving the equation 100P - 4,000 = .3 100P

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