Will you receive a margin call

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Reference no: EM131573791

Youve borrowed exist20,000 on margin to buy shares in ABC, which is now selling at exist40 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later the stock price falls to S35 per share.

a. Will you receive a margin call?

b. How low can the price of ABC shares fall before you receive a margin call?

Reference no: EM131573791

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