What will be the actual margin in your account

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Reference no: EM131622428

You buy 500 shares of BHC stock at $80 a share on margin. The initial margin is 50% and the maintenance margin requirement is 30%. If the stock price drops to $60, what will be the actual margin in your account?

a. 67%

b. 50%

c. 33%

d. 25%

2. If a portfolio manager wanted to hedge the risk associated with a substantial downturn in the US stock market, which of the following would be an appropriate strategy to implement?

a. Sell off all foreign-owned securities within the portfolio

b. Sell S&P500 futures contracts

c. Purchase call options on currently held US stocks

d. Purchase more US stocks now

Reference no: EM131622428

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