You purchase shares with a market price of $60 using an 80% margin requirement. If the margin maintenance is 30%, before you would have a margin call the market price could fall to

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Quizplus · Accepted Answer

The initial investment is 20% of $60, which is $12. The maintenance margin is 30%, so the equity must be at least 30% of the market value. If the market price falls to $17, the equity would be $12, which is 30% of $40 (the loan amount), thus avoiding a margin call.

You Purchase Shares with a Market Price of $60 Using