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Unformatted text preview: Communications as is possible using margin debt. If your brokerage requires 50% minimum initial margin, and has a 30% minimum maintenance margin requirement, what percent decrease in Qwest Communications stock price will trigger a margin call? How much equity will you have after a 15% decline in Qwest Communications stock price? 5. Suppose you want to purchase $11,200 worth of stock trading at $28 per share. The broker allows you to borrow money with no less than 50% initial margin. A. How much money can you borrow, and how much of your own money must be used? B. What is the margin percentage if the stock increases to $34 per share? C. If the maintenance margin is 25%, at what price would the stock have to be for you to receive a margin call?...
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This note was uploaded on 12/08/2010 for the course FIN 4092N taught by Professor Spencer during the Spring '10 term at Dowling.
- Spring '10