Bubba buys $100,000 of US Treasury 10½s of 31 on margin. If the current market price is 92.16, what is Bubba's minimum deposit requirement?
A)$4,625
B)$5,550
C)$10,000
D)$25,000

Question

Quizplus · Accepted Answer

$5,500. The NYSE maintenance requirements on obligations of the US treasury vary depending upon the term of the instrument. For 20-year bonds, the requirement is 6% of the market value. Multiplying the market value of $92,500 by 6% equals $5,500.

Bubba Buys $100,000 of US Treasury 10½s of 31 on Margin