Question

Min maint. margin when < $5=greater of 100% or $____ per share. Min maint. margin when < $10 (but>5)= greater of 30% or $_____ per share:

A) $2 / $5.
B) $1 / $2.
C) $0.50 / $1.
D) $3 / $6.

Answer 1

The question is about determining the appropriate fixed dollar amounts per share that represent the minimum maintenance margin requirements for stocks priced below $5 and those between $5 and $10. The correct answer will identify the greater amount between a percentage of the stock's value or the specified fixed dollar values.

Step-by-step explanation:

The question pertains to the regulatory requirements for the minimum maintenance margin necessary when trading stocks at certain price levels. Specifically, this involves determining the greater value between a percentage of the stock's price or a fixed dollar amount per share when the stock's price is below $5 or between $5 and $10. The options provided for the fixed dollar amounts include $2 / $5, $1 / $2, $0.50 / $1, and $3 / $6 per share.

Although the exact values can depend on the regulations set by the exchange or governing body, commonly, the minimum maintenance margin for a stock priced under $5 will be the greater of 100% of the stock's value or a fixed dollar amount per share. Similarly, for a stock priced between $5 and $10, it's the greater of 30% of the stock's value or a different fixed dollar amount per share. The correct choice needs to provide two dollar values that represent these regulatory figures.