Assume you bought a stock on margin and the stock price went down enough that you received a margin call. You can either deposit more money or sell...
View the step-by-step solution to:

Question

Assume you bought a stock on margin and the stock price went down enough that you received a margin call. You can

either deposit more money or sell some of the stock to meet the margin call. Is the number of shares you need to sell equal to the cash you need to deposit divided by the market price of the stock? Why/why not? Show mathematically (that does not mean giving a numerical example)

Top Answer

No this does not mean that the margin call will... View the full answer

Sign up to view the full answer

Why Join Course Hero?

Course Hero has all the homework and study help you need to succeed! We’ve got course-specific notes, study guides, and practice tests along with expert tutors.

  • -

    Study Documents

    Find the best study resources around, tagged to your specific courses. Share your own to gain free Course Hero access.

    Browse Documents
  • -

    Question & Answers

    Get one-on-one homework help from our expert tutors—available online 24/7. Ask your own questions or browse existing Q&A threads. Satisfaction guaranteed!

    Ask a Question