You’ve just opened a margin account with $14,000 at your local brokerage firm. Y
ID: 2726046 • Letter: Y
Question
You’ve just opened a margin account with $14,000 at your local brokerage firm. You instruct your broker to purchase 700 shares of Landon Golf stock, which currently sells for $61 per share.
What is your initial margin? (Enter your answer as a percent rounded to 2 decimal places. Omit the "%" sign in your response.)
Construct the equity account balance sheet for this position. (Omit the "$" sign in your response.)
Liabilities and account equity
You’ve just opened a margin account with $14,000 at your local brokerage firm. You instruct your broker to purchase 700 shares of Landon Golf stock, which currently sells for $61 per share.
Explanation / Answer
Answer 1.
Balance in Accont = $14,000
Amount Required to purchase 700 shares for $61 = $42,700
Amount taken as loan = $28,700
Initial Margin = 28700 / 42700 * 100
= 0.6721
= 67.21%
Answer 2.
Assets Amount Liabilities And Account Equity Amount 700 Shares 42,700 Margin Loan 28,700 Account Equity 14,000 Total 42,700 Total 42,700Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.