You Have a Margin Account with a 65% Initial Margin

question 98

Multiple Choice

You have a margin account with a 65% initial margin and a 30% maintenance margin. What is the maximum amount you can purchase of a stock if your cash balance in the account is $14,600?

• A) $19,710.00
• B) $22,461.54
• C) $24,090.00
• D) $41,713.79
• E) $48,666.67

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Definitions:

Securities Regulation

The body of laws and regulations governing the issuance, trading, and sale of securities to protect investors and maintain fair and efficient markets.

Market Efficiency

Refers to the extent to which stock prices and other securities prices reflect all available, relevant information.

Market Integrity

The condition of a financial market being free from manipulation or fraudulent trading practices, ensuring fair and efficient operation.

Federal and Provincial Jurisdiction

The division of powers and responsibilities between the federal government and the provinces.