An investor purchases 100 shares of a $60 stock and posts margin of 50 percent. The required margin is 30 percent.
a. How much does the investor put up initially in order to purchase the stock?
b. Calculate the actual margin if the price of the stock drops to $55.
c. At what stock price will a margin call occur?

Question

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The Answer of An investor purchases 100 shares of a $60 stock and posts margin of 50 percent. The required margin is 30 percent.
a. How much does the investor put up initially in order to purchase the stock?
b. Calculate the actual margin if the price of the stock drops to $55.
c. At what stock price will a margin call occur?

An Investor Purchases 100 Shares of a $60 Stock and Posts