If the initial margin is $5,000, the maintenance margin is $3,500 and your balance is $3,100, how much must you deposit?
A) $1,500
B) $400
C) $1,900
D) 0
E) none of the above

Question

Quizplus · Accepted Answer

In order to determine how much deposit is required, we need to calculate the amount of equity left in the account. 
Equity = Balance - Initial Margin = $3,100 - $5,000 = -$1,900
Since the equity is less than the maintenance margin of $3,500, a deposit is required to bring the equity back up to the maintenance margin level. 
Deposit required = Maintenance Margin - Equity = $3,500 - (-$1,900) = $5,400
Therefore, Choice C is the correct answer.

If the Initial Margin Is $5,000, the Maintenance Margin Is