Question

Assume that a customer has an established margin account with no special memorandum account, and the account is restricted. With the Regulation T requirement at 50%, the purchase of $10,000 worth of stock would generate a Regulation T call of

Answer 1

Answer: $5000

Step-by-step explanation:

Given that customer has an established margin account with no special memorandum account, and the account is restricted. With the Regulation T requirement at 50%, the purchase of $10,000 worth of stock would generate a Regulation T call of :

Margin requirement = 50%

Worth of stock = $10,000

The regulation T- call which will be generated is a deposit of the full margin requirement of the purchase.

Since margin requirement = 50% and worth of stock = $10,000

Regulation T-call = 50% of $10,000

0.5 × $10,000 = $5,000

Hence, regulation T- call is $5,000