Question: You had a margin account with $5,000 equity. Together with the $5,000 you borrowed from your broker, you purchased 100 shares of IBM stocks at

You had a margin account with $5,000 equity. Together with the $5,000 you borrowed from your broker, you purchased 100 shares of IBM stocks at $100 per share.

a. (5 pts) What is the initial margin of your account? A. 30% B. 50% C. 70% D. 90%

b. (5 pts) One year later (today), the IBM stock price falls to $60 per share. Assume margin interest rate is 9% per year. What is the current margin of your account? A. 83.33% B. 55.05% C. 25.67% D. 9.17%

Please show work written out.

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