Equity Investments Q66

66Mr. Aslam opens a margin account with an initial deposit of $6,000. He then purchases 250 shares of a stock at $35 each on margin, and his account requires a maintenance margin of 35%. Ignoring commissions and interest, the price at which Mr. Aslam will receive a margin call is closest to:

Option : B
Explanation : Equity / Market Value = Maintenance Margin {6000 + [P x 250 – (35 x 250)]}/ P x 250 = 35% P = $16.92.

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