Answer:
$45,000
Explanation:
Credits = $45,000
Short Market Value = $45,000
Equity % = Credits - Short Market Value
=> $45,000 - $45,000 = 0℅
Margin = $22,500 = 50%
Therefore, Total Credits = $45,000 + $22,500 = $67,500
If the market value falls to $30,000, the account will show:
Credits - Short Market Value = Equity %
$67,500 - $30,000 = $37,500 = 125% of short market value
However, in order to support a $30,000 stock position at 50% margin,
We have $30,000 / 2= $15,000.
Hence, given that the account has $37,500 of equity, the excess is:
$37,500 - $15,000 = $22,500 which may be borrowed and is the SMA amount.
Therefore, with $22,500 of SMA, double of the amount may be purchased or sold short in other marginable securities.
$22,500 * 2= $45,000.
The final answer is $45,000
