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At the beginning of the day, you purchased 300 shares of stock for $75 a share...

At the beginning of the day, you purchased 300 shares of stock for $75 a share with an initial cash investment of $12,000. Your broker requires a 30 percent maintenance margin. At the end of the day, you took care of the margin call by depositing additional $500 in your brokerage account. What was the price of stock at the end of the day?

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Answer #1

we have 30% maintenance margin required to keep with broker

Total value of position 300*75=22500

He has invested initial cash $12000

Total value of position=34500

If this value reaches to 22500*0.3=6750 we will receive a margin call

Now to reach this level the stockc should have decreased by certain peprcentages

34500-6750=$27250 thi amount got viped out plus $500 also got wiped out therfore in total $27750 is reduced from margin account hence remaining value of an account is 6250

then 6250/300=$20.8

Hence $20.8 would be the price at the end of the day

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