You own 300 shares of a stock that you purchased on margin. The stock is currently valued at $19 a share. Your broker advised you today that your minimum equity position for this purchase is $1,710 as of today. What is the maintenance margin percentage?
A) 25%
B) 30%
C) 35%
D) 40%
E) 50%

Question

Quizplus · Accepted Answer

The maintenance margin percentage is calculated by dividing the minimum equity requirement by the total value of the stock. Here, the total value of the stock is 300 shares * $19 = $5,700. The minimum equity requirement is $1,710. So, the maintenance margin percentage is $1,710 / $5,700 = 0.3, or 30%.

You Own 300 Shares of a Stock That You Purchased