Suzette recently purchased 300 shares of Nu Electronics stock for $4.40 a share. Her broker required a cash payment of $1,320, plus trading costs, for the purchase. What is the initial margin requirement on this stock?

Question

Quizplus · Accepted Answer

The initial margin requirement is 100% because Suzette paid the full price of the stock ($4.40 per share for 300 shares equals $1,320) plus trading costs. This means she did not borrow any money from her broker to make the purchase, indicating a 100% margin requirement.

Suzette Recently Purchased 300 Shares of Nu Electronics Stock for $4.40