Buffet purchased 500 shares of Telsa Motors (TSLA) stock trading at $40 per share. Assume that...

Buffet purchased 500 shares of Telsa Motors (TSLA) stock trading at $40 per share. Assume that Buffet’s account has an initial margin requirement of 60%. Moreover, suppose Warren’s broker requires a maintenance margin of 30%.

Required

Calculate the price at which Buffet will receive a margin call.

Expert Solution

jeff jeffy answered 2 years ago

Warren purchased 500 shares of Telsa Motors (TSLA) stock trading at $40 per share. Assume that...

Warren purchased 500 shares of Telsa Motors (TSLA) stock trading at $40 per share. Assume that Warren’s account has an initial margin requirement of 60%. Moreover, suppose Warren’s broker requires a maintenance margin of 30%. Required Calculate the price at which Warren will receive a margin call.

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