Using margin, a trader bought 100 shares of a $150 stock. The initial margin was 35 percent and the maintenance market was 25 percent. If the price immediately drops to $125, the trader's margin account balance will be closest to:   $2,750. $3,125. $3,635. $3,950. $7,250. None of the above answers is correct.

Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
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  1. Using margin, a trader bought 100 shares of a $150 stock. The initial margin was 35 percent and the maintenance market was 25 percent. If the price immediately drops to $125, the trader's margin account balance will be closest to:

 

  1. $2,750.
  2. $3,125.
  3. $3,635.
  4. $3,950.
  5. $7,250.
  6. None of the above answers is correct.
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