Answer:
a. will you receive a margin call?
No you wouldn't. You borrowed $20,000 on the margin which means that you invested $20,000 of your own money. You purchased 1,000 stocks (= $40,000 / $40) of ixnay at $40, and now the stock price is $35. This means that you lost $5,000, and you percentage on the margin = $15,000 / $35,000 = 43%. Since the maintenance margin is 35%, you are still in.
b. how low can the price of ixnay shares fall before you receive a margin call?
we can use the following formula = (1,000price - $20,000)/1,000price = 35%
350price = 1,000price - $20,000
$20,000 = 1,000price - 350price = 650price
price = $20,000/650 = $30.769 ≈ $30.77 or lower
