If IIROC limits the margin on a stock to 70 percent,initially how much money would you need to personally invest to purchase $10000 worth of BMO stock?

Question

Quizplus · Accepted Answer

If the margin on a stock is limited to 70 percent, it means that you can borrow up to 30 percent of the purchase price. To determine how much money you personally need to invest, you need to subtract the amount of the margin from the purchase price. In this case, 30 percent of $10000 is $3000, so you would need to invest $7000 ($10000 - $3000) of your own money to purchase $10000 worth of BMO stock. Therefore, the best choice is Option B.

If IIROC Limits the Margin on a Stock to 70