Margin requirement, You purchase shares with a market price

Margin requirement

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Reference no: EM132036914

1. You purchase shares with a market price of $60 using an 80% margin requirement. If the maintenance margin is 30%, before you would have a margin call the market price could fall to

(a) $8. (b) $12. (c) $17. (d) $24. (e) $48.

2. You purchase 400 shares of stock at a price of $20 per share. Using the minimum margin requirement of 70%, your equity would be

(a) $ 2,400. (b) $ 5,600. (c) $ 7,200. (d) $ 8,000. (e) $10,000.

Reference no: EM132036914

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