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Nancy purchased $80,000 worth of common stock by borrowing $32,000 from her broker. She paid the...

Nancy purchased $80,000 worth of common stock by borrowing $32,000 from her broker. She paid the rest to satisfy the initial margin requirement. The initial stock price is $160 per share. The maintenance margin requirement is 45%. The broker charges 8% on the margin loan. What is the initial margin requirement?

A.

50.0%
B.

73.3%
C.

60.0%
D.

66.7%

Solutions

Expert Solution

Initial Margin Requirement = (80,000 - 32,000)/80,000

Initial Margin Requirement = 60.0%

Option C is co

jeff jeffy answered 2 years ago
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