Donna recently purchased 500 shares of Deltona stock for $28.60 a share. Her broker required a cash payment of $10,725, plus trading costs, for the purchase. What is the initial margin requirement on this particular stock?

Question

Quizplus · Accepted Answer

The initial margin requirement is calculated by dividing the cash payment by the total cost of the shares. The total cost of the shares is 500 shares * $28.60 = $14,300. The initial margin requirement is $10,725 / $14,300 = 0.75 or 75 percent.

Donna Recently Purchased 500 Shares of Deltona Stock for $28