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You decide to buy 700 shares of stock at a price of $74 and aninitial...

You decide to buy 700 shares of stock at a price of $74 and an initial margin of 50 percent. What is the maximum percentage decline in the stock price before you will receive a margin call if the maintenance margin is 35 percent? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Input the amount as a positive value.)

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Expert Solution

Margin Call Price =

=

= 56.92

Decline % = 74 - 56.92 / 74 = 23.08%

jeff jeffy answered 2 years ago
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