Question: Paul has a margin account with 40% initial margin requirement. He deposits P50,000. Suppose the stock is selling at P35 per share. Questions: (5 points

Paul has a margin account with 40% initial margin requirement. He deposits P50,000. Suppose the stock is selling at P35 per share.

Questions: (5 points each)

a.How many shares can Paul purchase using the maximum allowable margin?

b.If the maintenance margin requirement is 30%, to what price pershare can the stock fall before Paul will receive a margin call?


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