USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Kathy Smith has a margin account with a balance of $60,000. Initial margin requirements are 80 percent, and Jackson Industries is currently selling at $40 per share.
-Refer to Exhibit 3.3. How many shares of Jackson can Kathy buy?
A) 1875
B) 1500
C) 1750
D) 1200
E) 950

Question

Quizplus · Accepted Answer

Kathy can buy 1875 shares of Jackson. Marginable equity = $60,000 x 80% = $48,000Shares that can be bought = $48,000/$40 = 1875 shares