Question

Jim purchased 100 shares of stock at a price of $10 a share. He utilized his 80% margin account to make the purchase. How much at least does Jim need to deposit in his account?

A) $200
B) $800
C) $1,000
D) $2,000

Answer 1

Jim needs to deposit at least $200 in his account.

Step-by-step explanation:

To calculate the minimum deposit Jim needs to make in his account, we need to determine the total value of the stock he purchased. Jim bought 100 shares of stock at $10 per share, so the total value of the stock is 100 * $10 = $1000. Since he utilized his 80% margin account, he only needs to deposit 20% of the total value of the stock. Therefore, the minimum deposit Jim needs to make is 20% of $1000, which is 0.2 * $1000 = $200.