Assume You Have a Margin Account with a 50% Initial

question 60

Multiple Choice

Assume you have a margin account with a 50% initial margin.You purchase 100 shares of stock at $80 per share.The price increases to $100 per share.What is the net value of your investment (margin) now?

• A)$10,000
• B)$8,000
• C)$6,000
• D)$5,000
• E)$2,000

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Definitions:

Account Title Column

The section of an accounting ledger or journal used to record the name of the account affected by each transaction.

Accounts Payable

Short-term liabilities or debts a company owes to its suppliers or creditors for goods and services received but not yet paid for.

Deferred Revenue

Income received by a company for goods or services yet to be delivered or performed, recognized as a liability on the balance sheet.

Utilities Expense

Utilities expense refers to the cost incurred by a business for the consumption of utility services such as electricity, water, and gas.