Suppose that you have $82,500 to invest and would like to purchase 1500 shares o

Question

Suppose that you have $82,500 to invest and would like to purchase 1500 shares of ABC Corp.'s shares which are currently trading for $100.00 per share. Law requires that all brokers have an Initial Margin of 50% but your broker demands a 55% Initial Margin. Also, your broker requires 35% Maintenance Margin at all times.If the stock goes up to $110 how much have you made on the transaction after closing the account, disregarding any transactions costs, taxes, brokerage fees, etc.

a) $14,000

b) $15,000

c) $16,000

d) $17,000

Explanation / Answer

The answer will be $ 16000

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