What is the actual margin now

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Question - An investor buys 100 shares of Altria at $82 per share on margin. The initial margin requirement is 50 percent, and the maintenance margin is 30 percent.

a. The price of Altria drops to $61 per share. What is the actual margin now?

b. The price of Altria declines further to $59.50. Show why a margin call is generated or is not warranted.

c. The price declines yet again to $55.25. Show by calculations why a margin call is generated.

d. Using the information in (3), how much cash must be added to the account to bring it into compliance with the margin requirements?

Reference no: EM133249353

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