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You've borrowed $22,000 on margin to buy shares in Disney, which is now selling at $44...

You've borrowed $22,000 on margin to buy shares in Disney, which is now selling at $44 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price falls to $42.50 per share.


a-1.

What is the percentage margin on the above transaction? (Round your answer to 2 decimal places.)


  Percentage margin %


a-2. Will you receive a margin call?
Yes
No

    

b.

How low can the price of Disney shares fall before you receive a margin call? (Round your answer to 2 decimal places.)


  Lowest price $   

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Expert Solution

SEE THE IMAGE. ANY DOUBTS, FEEL FREE TO ASK. THUMBS UP PLEASE

jeff jeffy answered 10 months ago
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