Purchased using the investor capital and margin loan

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Reference no: EM131883701

Use the following information to answer the next two questions:

An investor owns 20,000 shares of SPY worth $210 per share. The shares were purchased using the investor’s capital and a margin loan. The margin loan balance is $2.5 million. Compute the investor’s margin ratio and identify it among the following choices:

A. 0.405

B. 0.525

C. 0.595

D. 0.715

E. 0.800

If the maintenance margin for the SPY investor is 0.30, at what SPY share price will the investor receive a margin call?

A. 63.00

B. 178.57

C. 183.45

D. 196.13

E. 202.36

Reference no: EM131883701

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