You Own 700 Shares of a Stock That You Purchased

question 31

Multiple Choice

You own 700 shares of a stock that you purchased on margin at a price per share of $20.12.The stock is currently valued at $23 a share.Your broker advised you today that your minimum equity position for this purchase is $5,635 as of today.What is the maintenance margin percentage?

• A)25 percent
• B)30 percent
• C)35 percent
• D)40 percent
• E)50 percent

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Definitions:

Maturity

The date on which a financial obligation, such as a bond or loan, is due to be fully paid off.

Obligations

A duty or responsibility to fulfill an agreement, such as financial repayments.

Interest

The charge for the privilege of borrowing money, typically expressed as an annual percentage rate.

Payroll Tax Expense

The financial charge associated with employing labor, including taxes imposed by government entities such as Social Security and Medicare taxes in the United States.