Todd has a margin account with $17,400 in available cash.The initial margin is 70 percent and the maintenance margin is 30 percent.What is the maximum number of shares he can purchase if the price per share is $44?
A) 395 shares
B) 564 shares
C) 698 shares
D) 744 shares
E) 842 shares

Question

Quizplus · Accepted Answer

Maximum purchase = $17,400 / 0.7 = $24,857.14
Maximum number of shares = $24,857.14 / $44 = 564 shares, rounded down to the last full share

Todd Has a Margin Account with $17,400 in Available Cash