Theresa Has a Margin Account with a 60 Percent Initial

question 13

Multiple Choice

Theresa has a margin account with a 60 percent initial margin requirement and a 35 percent maintenance margin.What is the maximum dollar amount of stock she can purchase if her cash balance in the account is $35,300?

• A) $19,140.00
• B) $31,900.00
• C) $44,093.33
• D) $58,833.33
• E) $91,142.86

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Definitions:

Property

Assets or possessions owned by an individual or company, encompassing both tangible and intangible assets.

Financial Statements

Documents that provide an overview of a company's financial condition in both short and long term, including balance sheet, income statement, and cash flow statement.

Depreciable Asset

An asset that loses value over time due to wear and tear or obsolescence and can have its cost spread out over its useful life for accounting purposes.