Youve borrowed exist20000 on margin to buy shares in abc, Ask an Expert

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Youve borrowed exist20,000 on margin to buy shares in ABC, which is now selling at exist40 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 S35 per share.

a. Will you receive a margin call?

b. How low can the price of ABC shares fall before you receive a margin call?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92382506

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