Margin call price is the amount borrowed divided by:
A) number of shares x (1 - initial margin proportion).
B) number of shares x (1 - maintenance margin proportion).
C) current value of the shares purchased x (1 - initial margin proportion).
D) current value of the shares purchased x (1 - maintenance margin proportion).

Question

Quizplus · Accepted Answer

The margin call price is calculated by dividing the amount borrowed by the number of shares, then multiplying by (1 - maintenance margin proportion). This ensures the investor maintains the required equity level in the account.

Margin Call Price Is the Amount Borrowed Divided By