Staci just used $6,000 of cash plus a $3,500 margin loan to purchase $9,500 worth of stock. This is the only transaction in her brokerage account. According to her account balance sheet, she now has account equity of:

Question

Quizplus · Accepted Answer

Account equity is calculated as the value of the securities minus any outstanding margin loan. In this case, the value of the securities is $9,500 and the outstanding margin loan is $3,500, so the account equity is $6,000.

Staci Just Used $6,000 of Cash Plus a $3,500 Margin