The margin requirements are: Initial 50/Maintenance 40. Ignore interest. ABC shares trade at $60. You buy 200 shares at $60 per share in your margin account. Question 31
The margin requirements are: Initial 50/Maintenance 40. Ignore interest. ABC shares trade at $60. You buy 200 shares at $60 per share in your margin account. Question 31
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
Related questions
Question
![**Educational Text on Margin Accounts**
**The margin requirements are: Initial 50/Maintenance 40. Ignore interest.**
ABC shares trade at $60. You buy 200 shares at $60 per share in your margin account.
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**Question 31**
The value of shares is $ ......................................
[Input Field]
---
**Question 32**
The margin is $ ......................................
[Input Field]
---
**Question 33**
You will get the margin call when the stock price drops down to P = $ ......................................
[Input Field]
---
**Explanation**: This section provides a series of questions designed to test your understanding of margin trading. The initial margin requirement is 50%, which means you must have at least 50% of the purchase price in your margin account at the time of purchase. The maintenance margin is 40%, the minimum equity you need to maintain in your margin account before you risk a margin call. Use these concepts to calculate the answers to the questions provided.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F647a6f54-b5ba-4631-94b7-ffd1df63771e%2F06a443b4-0e27-4fa0-a79e-a4e5fe149cbb%2Fxvyyl2j_processed.png&w=3840&q=75)
Transcribed Image Text:**Educational Text on Margin Accounts**
**The margin requirements are: Initial 50/Maintenance 40. Ignore interest.**
ABC shares trade at $60. You buy 200 shares at $60 per share in your margin account.
---
**Question 31**
The value of shares is $ ......................................
[Input Field]
---
**Question 32**
The margin is $ ......................................
[Input Field]
---
**Question 33**
You will get the margin call when the stock price drops down to P = $ ......................................
[Input Field]
---
**Explanation**: This section provides a series of questions designed to test your understanding of margin trading. The initial margin requirement is 50%, which means you must have at least 50% of the purchase price in your margin account at the time of purchase. The maintenance margin is 40%, the minimum equity you need to maintain in your margin account before you risk a margin call. Use these concepts to calculate the answers to the questions provided.
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