Homework Answers
Q1) Initial margin = 50%
Price per share = $40
Initial margin per share = 40 × 50%
= $20
Q2) Margin call = Price × (1+initial margin) / (1+maintenance margin)
= 40 × ( 1+0.50) / (1+0.40)
= 40 × (1.50 / 1.40)
= 40 × 1.0714
= $42.86
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