You Purchased 100 Shares of IBM Common Stock on Margin

question 63

Multiple Choice

You purchased 100 shares of IBM common stock on margin at $130 per share. Assume the initial margin is 50%, and the maintenance margin is 30%. Below what stock price level would you get a margin call? Assume the stock pays no dividend; ignore interest on margin.

• A) $21.24
• B) $92.86
• C) $49.52
• D) $80.33

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Definitions:

Schooling

The process of educating individuals, typically in a formal institutional setting like schools or colleges.

Concrete Operational Reasoning

A stage in Piaget's theory of cognitive development where children aged 7 to 11 begin to think logically about concrete events but have difficulty understanding abstract or hypothetical concepts.

Comprehension

The ability to understand and grasp the meaning of spoken or written language and concepts.

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The collection of words that a person knows and utilizes in a specific language.