Using margin, a trader bought 100 shares of a $150 stock. The initial margin was 35 percent and the maintenance market was 25 percent. If the price immediately drops to $125, the trader's margin account balance will be closest to:   a. $2,750. X b. $3,125. c. $3,635. d. $3,950. e. $7,250. f. None of the above answers is correct.

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
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60. Using margin, a trader bought 100 shares of a $150 stock. The initial margin was 35 percent and the maintenance market was 25 percent. If the price immediately drops to $125, the trader's margin account balance will be closest to:

 

a. $2,750. X

b. $3,125.

c. $3,635.

d. $3,950.

e. $7,250.

f. None of the above answers is correct.

 

61. Using the data in the previous question, the trader will:

 

  1. Not receive a margin call.
  2. Receive a margin call for $4,375.
  3. Receive a margin call for $1,625.
  4. Receive a margin call for $2,500.
  5. Receive a margin call for $375.
  6. None of the above answers is correct.
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