If an investor uses the full amount of margin available,the equity in a margin account used for a stock purchase can be found as ________.

Question

Quizplus · Accepted Answer

The equity in a margin account used for a stock purchase can be found by subtracting the amount owed on the margin loan from the market value of the stock. This is because the amount owed on the loan represents the portion of the stock's value that has been borrowed, while the market value of the stock represents the total value of the stock. Therefore, the difference between the two is the equity that belongs to the investor.

If an Investor Uses the Full Amount of Margin Available,the