You purchased 1,000 shares of stock at $42 a share.The stock is currently selling for $45 a share.The initial margin was 70 percent and the maintenance margin is 30 percent.What is your current margin position?

Question

Quizplus · Accepted Answer

Margin loan = 1,000 × $42 × (1 - 0.70) = $12,600
Current equity = (1,000 × $45) - $12,600 = $32,400
Margin position = $32,400 / (1,000 × $45) = 72.00 percent

You Purchased 1,000 Shares of Stock at $42 a Share