Theresa has a margin account with a 60 percent initial margin requirement and a 35 percent maintenance margin. What is the maximum dollar amount of stock she can purchase if her cash balance in the account is $33,400?
A) $19,140.00
B) $31,900.00
C) $44,093.33
D) $55,666.67
E) $91,142.86

Question

Quizplus · Accepted Answer

The maximum dollar amount of stock she can purchase is calculated by dividing her cash balance by the initial margin requirement: $33,400 / 0.60 = $55,666.67.

Theresa Has a Margin Account with a 60 Percent Initial