Questions are based on the following information:
An investor buys 100 shares of Walmart at $45 per share on margin with an initial margin of 70% and a maintenance margin of 25%.In two months,the stock goes to $56.
-What is the actual margin when the stock price is $56?
A)65.9%
B)75.9%
C)79.9%
D)80.9%

Question

Quizplus · Accepted Answer

The actual margin is calculated as (Equity/Current Value of Stock). The equity is the initial investment plus the gain, which is $3150 + $1100 = $4250. The current value of the stock is $5600. Thus, the actual margin is $4250/$5600 = 75.9%.

Questions Are Based on the Following Information