Theresa Has a Margin Account with a 60 Percent Initial

question 71

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 $33,400?

• A) $19,140.00
• B) $31,900.00
• C) $44,093.33
• D) $55,666.67
• E) $91,142.86

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Definitions:

Investment Opportunity

A potential venture or asset that presents the possibility for financial growth or returns.

ROI

Return on Investment, a financial ratio indicating the profitability of an investment relative to its cost.

Combined ROI

A metric that calculates the total return on investment from multiple investments or business units combined.

Residual Income

The amount of income that an individual or company has after all personal debts and expenses have been paid.