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Answer:
Current Margin = 74.95%
Explanation:
given data
no of share purchased = 100 shares
Stock Cost per share = $24.80
initial margin = 80 percent
maintenance margin = 50 percent
currently valued = $19.80
solution
we get here first Margin Loan that is express as
Margin Loan = No. of shares × Stock Cost × (1 - Initial Margin) ..........1
put here value and we get
Margin Loan = 100 × $24.80 × (1 - 0.80)
Margin Loan = $496
so here current stock value that is express as
current stock value = No. of Shares × Current Stock Value ..............2
put here value
current Stock Value = 100 × $19.80
current Stock Value = $1,980
so here Current Equity is
Current Equity = Current Stock Value - Margin Loan ............3
Current Equity = $1,980 - $496
Current Equity = $1,484
so here as we get Current Margin that is
Current Margin = Current Equity ÷ Current Stock Value ............4
put here value
Current Margin =
Current Margin = 74.95%