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A customer has an existing margin account that shows the following:
Long market value: $100,000
Debit balance $60,000

If the market value declines to $60,000, the customer will receive a maintenance call for:
A. $5000
B. $10,000
C. $15,000
D. $20,000

Respuesta :

Answer:

The answer is option C

Explanation:

Long Market Value - Debit = Equity %

$100,000 $60,000 $40,000 40%

If the market value declines to $60,000, the account will now show:

Long Market Value - Debit = Equity %

$60,000  - $60,000 = $0 ( 0% )

Minimum margin is 25% of market value, i.e  25% of $60,000 = $15,000.

Therefore the customer will receive a maintenance call for $15,000.

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