The balance in your brokerage account is $1500 and you make a stock purchase of 200 shares at $19. You need to add $400 to your account to cover the margin rate of 50 percent.

Question

Quizplus · Accepted Answer

The cost of purchasing 200 shares at $19 each is $3,800 (200 x 19).

Since the margin rate is 50%, you need to have at least 50% of the cost of the purchase in your account, which is $1,900 (50% of $3,800).

Since you only have $1,500 in your account, you need to add $400 ($1,900 - $1,500) to cover the margin rate.

The Balance in Your Brokerage Account Is $1500 and You