An investor purchases 300 shares of ABC stock on margin. The current price of ABC stock...

An investor purchases 300 shares of ABC stock on margin. The current price of ABC stock is $70 per share, the initial margin requirement is 60% and the maintenance margin requirement is 35%.

A) What is the dollar amount of the loan the investor receives from her broker for this margin purchase?

B) How far can the stock price fall before the investor gets a margin call?

Expert Solution

please ignore b as it is calculated with 30% maintenance margin, again I did with 35 % please check last (b) not first one

jeff jeffy answered 2 years ago

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