Question: The margin requirement is 50% and you purchase 300 shares of a $25 stock
Suppose that the margin requirement is 50% and you purchase 300 shares of a $25 stock on a margin. There is no interest on the money you borrow, and there is no transaction fee.
- If the value of your investment falls by 10%, what is your holding period yield?
- Suppose your investment continues to fall, and you get a margin call when the stock price hits $15. What is maintenance margin?
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