USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)

question 61

Multiple Choice

USE THE INFORMATION BELOW FOR THE FOLLOWING PROBLEM(S)
Jackie has a margin account with a balance of $150,000. The initial margin deposit is 60 percent and Turtle Industries is currently selling at $50 per share.
-Refer to Exhibit 3.1. If the maintenance margin is 25 percent, to what price can Turtle Industries fall before Jackie receives a margin call?

• A) $14.56
• B) $23.17
• C) $32.42
• D) $26.67
• E) $25.52

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Definitions:

Cost

The amount of money or resources expended to purchase or produce a good or service.

Capital Gains

Capital gains are the profits realized from the sale of assets, such as stocks or real estate, when the selling price exceeds the original purchase price.

Significant Influence

A level of power that allows an entity to affect the decision-making of another entity without full control, often associated with ownership of a significant but not majority share percentage.

Significantly Influenced

A situation where an entity has a notable but not controlling interest in another entity, impacting its financial and operating policies.