Question

a. How many shares can Lauren purchase using the maximum allowable margin? Round your answer down to the nearest whole share, if necessary. shares b. What is Lauren's profit (loss) if the price of Gen

Answer 1

Lauren can purchase a certain number of shares using the maximum allowable margin percentage and the total amount of funds she has available.

Step-by-step explanation:

To determine the number of shares Lauren can purchase using the maximum allowable margin, we need to know the maximum allowable margin percentage and the total amount of funds Lauren has available. Let's say the maximum allowable margin percentage is 50% and Lauren has $10,000 available. She can purchase shares worth $20,000 (50% of $20,000) using the maximum allowable margin. If the share price of General Company is $10, then Lauren can purchase 2000 shares (worth $20,000/$10).