You made a $10,000 stock purchase on margin (50%). You put $5,000 into your account initially to cover the purchase. Your stock has declined in value to $7,000 and you receive a margin call
How much cash must you put into your account as a result of the margin call?
A) $1,500
B) $3,000
C) $5,000
D) None—you already have $5,000 in your account.
Answer: A
Explanation: A)
$10,000 × 50% = $5,000
$7,000 × 50% = $3,500
$1,500
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