You recently purchased 200 shares of stock at a cost per share of $22.25. The initial margin requirement on this stock is 75% and the maintenance margin is 50%. The stock is currently valued at $24.00 a share. What is your current margin position? Ignore margin interest.
A)73.01%
B)73.83%
C)74.95%
D)75.69%
E)76.82%

Question

Quizplus · Accepted Answer

The current margin position is calculated as (Current Value - Loan) / Current Value. The initial investment is 200 shares * $22.25 = $4,450. The initial margin requirement is 75%, so the loan is 25% of $4,450 = $1,112.50. The current value is 200 shares * $24.00 = $4,800. The current margin position is ($4,800 - $1,112.50) / $4,800 = 76.82%.

You Recently Purchased 200 Shares of Stock at a Cost