Whitney just purchased 100 shares of Disney (DIS)stock for $135.00 a share. Her broker required a cash payment of $10,125, not including trading costs, for the purchase. What is her initial margin requirement for this stock?

Question

Quizplus · Accepted Answer

The initial margin requirement is calculated by dividing the cash payment by the total purchase price of the shares. The total purchase price is 100 shares * $135 = $13,500. The cash payment is $10,125. Therefore, the initial margin requirement is $10,125 / $13,500 = 0.75 or 75%.

Whitney Just Purchased 100 Shares of Disney (DIS)stock for $135