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You decide to open a margin account with your broker. You deposit $20,000 in your account. In addition, you borrow $20,000 from your broker and purchase 400 shares of XYZ corporation at $100 per share. As soon as you buy the stock, it drops to $90 per share. 3A) What is your margin rate after the stock price drop to $90 per share? 3B) If the stock drops further to $80 per share, how much money will you need to deposit in your account to bring the margin rate up to 40%?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92801406

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