You Purchased 100 Shares of Common Stock on Margin at $40

question 8

Multiple Choice

You purchased 100 shares of common stock on margin at $40 per share.Assume the initial margin is 50%, and the stock pays no dividend.What would the maintenance margin be if a margin call is made at a stock price of $25? Ignore interest on margin.

• A)0.33
• B)0.55
• C)0.20
• D)0.23

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Definitions:

Social Reproduction

The process by which societies transmit cultural, social, and economic systems across generations, maintaining continuity and norms.

Capitalist Economy

An economic system where private individuals or businesses own capital goods and the production of goods and services is based on supply and demand in a market.

Generational Reproduction

The process by which societal norms, values, and status are transmitted from one generation to the next, often perpetuating social inequalities.

Historically Deeply

Ingrained or entrenched within historical contexts, suggesting something has profound historical roots or influences.