You purchase 800 shares of stock on margin at a price of $46 per share. If the initial margin is 60 percent, what is your margin loan?
A) $16,960
B) $22,080
C) $18,310
D) $36,800
E) $14,720

Question

Quizplus · Accepted Answer

The total cost of the shares is 800 * $46 = $36,800. With an initial margin of 60%, you must pay 60% of the total cost, which is 0.60 * $36,800 = $22,080. The margin loan is the remaining 40%, which is $36,800 - $22,080 = $14,720.

You Purchase 800 Shares of Stock on Margin at a Price