Stephen is purchasing 1,000 shares of KPT, Inc., stock at a price per share of $18.60. What is the minimum amount the Federal Reserve will require Stephen to pay in cash for this purchase?

Question

Quizplus · Accepted Answer

The minimum amount the Federal Reserve will require Stephen to pay in cash for this purchase is the initial margin requirement, which is typically 50% for stocks. So, Stephen needs to pay 50% of the total purchase price, which is 1,000 shares x $18.60 per share x 50% = $9,300. Therefore, the correct answer is (C) $9,300.

Stephen Is Purchasing 1,000 Shares of KPT, Inc