You buy 400 shares of stock at a price of $64 and an initial margin of 50 percen

Question

You buy 400 shares of stock at a price of $64 and an initial margin of 50 percent. If the maintenance margin is 30 percent, at what price will you receive a margin call? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

You buy 400 shares of stock at a price of $64 and an initial margin of 50 percent. If the maintenance margin is 30 percent, at what price will you receive a margin call? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

Price will you receive a margin call = Stock Price*(1-Initial Margin%)/(1-maintenance margin%)

Price will you receive a margin call = 64*(1-50%)/(1-30%)

Price will you receive a margin call = $ 45.71

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