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10 August, 10:45

Assume you purchased 200 shares of GE common stock on margin at $70 per share from your broker. If the initial margin is 55%, how much did you borrow from the broker?

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  1. 10 August, 12:43
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    the amount borrowed from the broker is $6300.

    Explanation:

    Number of shares purchased S = 200

    Price of share P = $70 per share

    Initial Margin M = 55%

    Amount Borrowed = S*P * (1 - M)

    = 200*70 * (1 - 55%)

    = $6300

    Therefore, the amount borrowed from the broker is $6300.
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