You recently purchased 100 shares of stock at a cost per share of $24.80.The initial margin requirement on this stock is 80 percent and the maintenance margin is 50 percent.The stock is currently valued at $19.80 a share.What is your current margin position? Ignore margin interest.
A)73.01 percent
B)73.83 percent
C)74.95 percent
D)75.69 percent
E)76.80 percent

Question

Quizplus · Accepted Answer

Margin loan = 100 × $24.80 × (1 - .80) = $496Current stock value = 100 × $19.80 = $1,980Current equity = $1,980 - $496 = $1,484Current margin = $1,484/$1,980 = 74.95 percent

You Recently Purchased 100 Shares of Stock at a Cost