Question

8. The minimum required margin (% of market value) is as follows. What is the margin...

8.

The minimum required margin (% of market value) is as follows. What is the margin on 500 shares priced at $2.3 is

  • p>=$2:            50% margin loan
  • $1.75<=P<$2: 40% margin loan
  • $1.50<=P<$1.75:         20% Margin loan

P<$1.50:          No margin loan

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Answer #1

Total value of the shares = 500*$2.3=1150$

For price of share greater than equal to $2, the margin loan available is 50% of share value = 50%* 1150 = $ $575

So margin amount = total share value - margin loan = 1150-575=575$

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