You Purchased 100 Shares of Common Stock on Margin at $45

question 20

Multiple Choice

You purchased 100 shares of common stock on margin at $45 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 $30? Ignore interest on margin.

• A) 0.33
• B) 0.55
• C) 0.43
• D) 0.23
• E) 0.25

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