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:

MR

Marginal Revenue, the change in total revenue that results from selling one additional unit of a product or service.

MC

The additional cost of producing one more unit of a product or service, known as marginal cost.

Substitute Brands

Brands that offer products or services which consumers may use in place of each other based on preference, price, or availability.

Increase Profits

Strategies or actions taken by a business to boost its earnings above its expenses.