Sarah Purchased 600 Shares of Detroit Motors Stock at a Price

question 82

Multiple Choice

Sarah purchased 600 shares of Detroit Motors stock at a price of $60 a share.The initial margin requirement is 70 percent and the maintenance margin is 30 percent.The effective interest rate on the margin loan is 6.5 percent.How much margin interest will she pay if she repays the loan in seven months?

• A) $387.29
• B) $404.12
• C) $417.29
• D) $530.42
• E) $647.96

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Definitions:

Free Trade

An economic policy that allows imports and exports between countries with minimal or no tariffs, quotas, subsidies, or prohibitions to encourage international trade.

Protection

Policies or measures taken by a government to shield its domestic industries from foreign competition, often involving tariffs or quotas.

Gasoline Prices

The cost per unit of gasoline, influenced by factors such as crude oil prices, refinery processes, taxes, and demand.

The Decline

A period during which economic activity decreases or is expected to decrease.