Question

"A customer's short margin account shows the following balances: Credit Balance: $120,000 SMV: $60,000 SMA: $30,000 What would the adjusted SMA balance be in the account after a short cover of 100 shares of MMM stock at $100 in the account?"

Answer 1

$35,000

Step-by-step explanation:

Calculation for adjusted SMA balance .

First step

Short cover =100 Shares × MMM stock $100

=$10,000

Second step is to find the 50% of the amount of $10,000

50%×$10,000

=$5,000

Third step is to calculate for adjusted SMA balance

Adjusted SMA balance=$SMA $30,000 +$5,000

Adjusted SMA balance=$35,000

Therefore the Adjusted SMA balance will be $35,000