Ask Question
18 May, 17:42

Assume you purchased 400 shares of XYZ common stock on margin at $30 per share from your broker. A. If the initial margin is 55%, the amount you borrowed from the broker is $5400. B. What is the new margin if the price of share falls to $26?

+4
Answers (1)
  1. 18 May, 19:43
    0
    Part A. $5,400

    Part B. $5,720

    Explanation:

    Part A.

    The Amount borrowed can be calculated by

    Amount Borrowed = 400 shares * $30 per share * (100% - 55%) = $5,400

    Part B.

    The New margin was 55% and as per the requirements the price of the share is $26, so

    The New Margin = 400 shares * $26 per share * 55% = $5,720
Know the Answer?
Not Sure About the Answer?
Get an answer to your question ✅ “Assume you purchased 400 shares of XYZ common stock on margin at $30 per share from your broker. A. If the initial margin is 55%, the ...” in 📙 Business if there is no answer or all answers are wrong, use a search bar and try to find the answer among similar questions.
Search for Other Answers