Question: Roger opens a margin trading account that has a 20% initial margin requirement. He wishes to invest $20,000 in an oil ETF in the account.

Roger opens a margin trading account that has a 20% initial margin requirement. He wishes to invest $20,000 in an oil ETF in the account. If his margin ever falls below 10% he will be required to post more capital to restore the account to the initial margin.

1. How much capital must Roger post to open the account?

A) $0

B) $4,800

C) $4,000

D) $16,000

E) Cannot be determined with the information provided

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