Let's say you just bought 150 shares of Beta Banana at $50 per share.The initial margin requirement
Fantastic news! We've Found the answer you've been seeking!
Question:
Let's say you just bought 150 shares of Beta Banana at $50 per share. The initial margin requirement is 65.5%, which means the amount borrowed is $2,588. The corresponding balance is presented below:
| Assets | Commitments and equity | |||
| Stock | $7,500.00 | Broker Loan | $2,587.50 | |
| Equity | $4,912.50 | |||
| Total assets | 7.500,00 | Total liabilities and equity | $7,500.00 | |
a. Now suppose the stock price falls to $37 per share. What is your current margin percentage? (Round your answer to 2 decimal places.)
Margin percentage (response) %
b. Build the balance sheet to show the current situation.
| Assets | Commitments and equity | |||
| Stock | $ (answer) | Broker Loan | $ (answer) | |
| Equity | $ (answer) | |||
| Total assets | $ (answer) | Total liabilities and equity | $ (answer) | |
C. If the maintenance margin is 45%, what is the highest stock price that will trigger a margin call? (Round your answer to 2 decimal places.)
Expert Answer:
Related Book For 
Posted Date:
