You’ve just opened a margin account with $15,000 at your local brokerage firm. Y

Question

You’ve just opened a margin account with $15,000 at your local brokerage firm. You instruct your broker to purchase 700 shares of Landon Golf stock, which currently sells for $53 per share.

What is your initial margin? (Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)

Construct the equity account balance sheet for this position. (Omit the "$" sign in your response.)

Liabilities and account equity

You’ve just opened a margin account with $15,000 at your local brokerage firm. You instruct your broker to purchase 700 shares of Landon Golf stock, which currently sells for $53 per share.

Explanation / Answer

1. Initial margin is 40.43% [$15,000÷(700×$53)].

2.

Assets Amount in $ Liabilities and account equity Amount in $ 700 shares      37,100.00 Margin loan (Balancing figure)      22,100.00 Account equity      15,000.00      37,100.00      37,100.00

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