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

question 38

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
• E) 0.25

---

Definitions:

Bell Ringing

The practice of producing musical sounds with a set of bells, typically in a church tower, by manipulating the bells to swing and strike.

Somatosensory Cortex

A region of the brain responsible for processing sensory information from various parts of the body, including touch, temperature, and pain.

Heterosexual

A sexual orientation characterized by an emotional, romantic, or sexual attraction to individuals of the opposite sex.

Sensory Response

Sensory response is the reaction of a person's sensory systems, such as sight, hearing, smell, taste, or touch, to external stimuli.