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Your Brokerage Firm Allows Market Trading with an Initial Margin

Question 12

Multiple Choice

Your brokerage firm allows market trading with an initial margin requirement equal to 60 percent plus an 8 percent broker loan rate.You have $6,000 to invest.How many shares of ABC can you purchase on margin? ABC stock currently sells for $50 a share.


A) 100
B) 200
C) 92
D) 194
E) 108

Correct Answer:

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