Sarah Purchased 700 Shares of Detroit Motors Stock at a Price

question 2

Multiple Choice

Sarah purchased 700 shares of Detroit Motors stock at a price of $55 a share. The initial margin requirement is 60% and the maintenance margin is 35%. The effective interest rate on the margin loan is 4.5%. How much margin interest will she pay if she repays the loan in four months?

• A)$227.62
• B)$303.32
• C)$417.29
• D)$530.42
• E)$647.96

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