A brokerage firm currently limits the margin rate to 70 percent.The amount that can be borrowed for a transaction to buy 100 shares at $50 is

Question

Quizplus · Accepted Answer

To buy 100 shares at $50 each, the total cost would be $5000.

With a margin rate of 70%, the investor can borrow up to 30% of the total cost, which is $1500.

Therefore, the amount that can be borrowed for the transaction is $3500 ($5000 - $1500).

The best choice is B.

A Brokerage Firm Currently Limits the Margin Rate to 70