Nelson Purchased 1,300 Shares of Stock for $15

question 44

Multiple Choice

Nelson purchased 1,300 shares of stock for $15.75 a share. The initial margin requirement is 70 percent and the maintenance margin is 40 percent. What is the maximum percent by which the stock price can decline before he receives a margin call?

• A) 30 percent
• B) 45 percent
• C) 50 percent
• D) 65 percent
• E) 70 percent

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Definitions:

Lochner V. New York

A landmark U.S. Supreme Court case in 1905 that struck down a New York law setting limits on working hours, marking a significant moment in the relationship between labor laws and governmental regulation.

Fourteenth Amendment

An amendment to the U.S. Constitution, adopted in 1868, granting citizenship to all persons born or naturalized in the United States and guaranteeing all citizens equal protection of the laws.

Government Interference

Actions by government bodies that affect the operations of businesses, organizations, or individual freedoms, often viewed negatively by those who advocate for minimal governmental involvement.

Charles Beard

An influential American historian who proposed that the Constitution was designed to protect the economic interests of its framers.