You invested in 800 shares of stock for $49.20 a share. The initial margin requirement is 65 percent and the maintenance margin is 35 percent.  What is the lowest the stock price can go before you receive a margin call?  What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 100%?   What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 0%?

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
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You invested in 800 shares of stock for $49.20 a share. The initial margin requirement is 65 percent and the maintenance margin is 35 percent. 

What is the lowest the stock price can go before you receive a margin call? 

What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 100%?

 

What is the lowest the stock price can go before you receive a margin call if both the initial and maintenance margins are 0%?

How would your answers to the three questions above change if you invested in 8000 shares instead of 800 shares?

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