Question

Your client has just opened a margin account with your brokerage firm and purchased 400 shares of stock for $55 per share. The firm has a 50% initial margin and 35% maintenance margin policy. Determine the price at which your client will receive a margin call. A) $31.43 B) $38.50 C) $42.31 D) $19.25

Name: your client has just opened a margin account with your brokerage firm and purchased 400 shares of stock for 55 per share the firm has a 50 initial margin and 35 maintenance margin policy det 55922
Uploaded: 2023-08-16T15:52:13-08:00
Duration: 11 min 17 s
Channel: Rabia Sarwar
Description: your client has just opened a margin account with your brokerage firm and purchased 400 shares of stock for 55 per share the firm has a 50 initial margin and 35 maintenance margin policy det 55922

          Your client has just opened a margin account with your brokerage
firm and purchased 400 shares of stock for $55 per share. The firm
has a 50% initial margin and 35% maintenance margin policy.
Determine the price at which your client will receive a margin
call.
A)
$31.43
B)
$38.50
C)
$42.31
D)
$19.25

Added by Margarita T.

Horngren’s Cost Accounting

Srikant M. Datar, Madhav V. Rajan 16th Edition

Instant Answer

Solved by Expert Rabia Sarwar

08/16/2023

Step 1

First, we need to calculate the total cost of the stock purchase: 400 shares x $55 per share = $22,000 Show more…

Show all steps

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Your client has just opened a margin account with your brokerage firm and purchased 400 shares of stock for $55 per share. The firm has a 50% initial margin and 35% maintenance margin policy. Determine the price at which your client will receive a margin call. A) $31.43 B) $38.50 C) $42.31 D) $19.25