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What is the initial margin ratio

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2) Suppose you want to buy 1200 shares of BMO in margin. Answer the following questions:
a. What is the initial margin ratio?
b. Suppose you are going to hold the shares for one year. At what price at the end of next year will your investment break even? (assuming no margin calls in the year)
c. How far could the stock price fall before getting a margin call?
d. If the stock price falls to $40, you would get a margin call. If this happens, how much new fund would you need to add to your account to respond the margin call?

Reference no: EM13488247

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