INVESTMENTS (LOOSELEAF) W/CONNECT
11th Edition
ISBN: 9781260465945
Author: Bodie
Publisher: MCG
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Chapter 21, Problem 4CP
Summary Introduction
Adequate information:
The required maintenance margin = $2500
Initial margin posted by Jerry Harris = $6000
Price per July silver futures contract = $28/ounce
Total amount of silver a silver contract includes = 5000 ounces
To construct:
First price per ounce at which Harris would receive a maintenance margin call.
Introduction:
A maintenance margin at 25% means that there must be a minimum amount of equity valued at 25% or more of the total value of the margin account. If one or more securities in the account falls below a certain price and these requirements are not met, the investor receives a margin call, sometimes known as a "fed call."
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Chapter 21 Solutions
INVESTMENTS (LOOSELEAF) W/CONNECT
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