What stock price will you receive margin call

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Reference no: EM131821975

Suppose you buy 500 shares of ABC stock at $60 per share using 60% initial margin (you contribute 60% and borrow the additional 40%). The brokerage firm you use requires a 25% maintenance margin and changes 6% market interest. At the end of one year, what stock price will you receive a margin call? SHOW YOUR WORK. Formula: (PQ-(borrowed + interest))/PQ = margin; where P = price of stock and Q = quantity of shares.

Reference no: EM131821975

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