Noah opened a margin account with stock broking company for a future contract valued at RM100,000. The initial margin is set at 10% of the contract value whilst the maintenance margin is 80% of the initial margin. A series of losses dropped the value of Noah's margin account to 20% lower than the maintenance margin level. Advise the broker on the amount that Noah should deposit in the margin account to the initial margin level when margin call is made.

Answer rating: 100% (QA)

To determine the amount that Noah should deposit in the margin account to reach the initial margin l... View the full answer