Consider the Following Data: YBM's Stock Price Is $110

question 16

Multiple Choice

Consider the following data: YBM's stock price is $110.The initial margin is 50 percent and the maintenance margin is 25 percent.If you buy 150 shares,borrowing 50 percent from the broker,at what stock price will you start to receive a margin call? (Hint: use the formula Margin= (Market value of assets - Loan) / Market value of assets. )

• A) $25
• B) $55.25
• C) $66.67
• D) $73.33
• E) None of these answers are correct.

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Definitions:

Fraudulent Transfers

The illegal or unethical transfer of property to avoid debts or obligations to creditors.

Voidable Preferences

Financial transactions that can be invalidated or reversed, often within bankruptcy proceedings, if they unfairly favor one creditor over others.

Trustee

An individual or organization appointed to manage and hold property or assets on behalf of another party.

Dischargeable

Referring to debts that can be eliminated or forgiven through legal processes, such as bankruptcy.