Question

Suppose that you just purchased 150 shares of XYZ stock for $60 per share. a. If the initial margin requirement is 71.00%, how much money must you borrow?

Answer 1

$2,610

Step-by-step explanation:

Calculation for how much money you must borrow.

Using this formula

Amount to be borrowed =( Purchased shares* Per share price*(Initial margin requirement percentage)

Let plug in the formula

Amount to be borrowed= 150 shares*$60 per shares *(1-0.71)

Amount to be borrowed=$9,000*(0.29)

Amount to be borrowed=$2,610

Therefore how much money you must borrow will be $2,610