Exhibit 4.3
Use the Information Below for the Following Problem(S)
Kathy Smith has a margin account with a balance of $60,000. Initial margin requirements are 80 percent, and Jackson Industries is currently selling at $40 per share.
-Refer to Exhibit 4.3.How many shares of Jackson can Kathy buy?
A) 1875
B) 1500
C) 1750
D) 1200
E) None of the above

Question

Quizplus · Accepted Answer

Letting P = price and Q = quantity of shares,
Kathy's share will represent 80% of PQ.
Thus 0.80X = $60,000 and X = $60,000 ¸ .80 = $75,000.
$ \therefore $  At $40 per share,she can purchase ($75,000 ¸ $40)= 1875 shares.

Exhibit 4.3 Use the Information Below for the Following Problem(S)