You buy 800 shares of stock at a price of $57 per share on 70 percent margin. How much money did you borrow?
A) $45,600
B) $18,300
C) $21,200
D) $31,920
E) $13,680

Question

Quizplus · Accepted Answer

When buying on margin, you are borrowing money to purchase stock. A 70 percent margin means you are putting down 70% of the purchase price and borrowing the remaining 30%. The total cost of the 800 shares at $57 per share is $45,600. Therefore, the amount borrowed is 30% of $45,600, which is $13,680.

You Buy 800 Shares of Stock at a Price of $57