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arlik [135]
3 years ago
10

A margin account has a market value of $24,000 and a debit balance of $20,000. The maintenance call will be for

Business
1 answer:
IrinaK [193]3 years ago
6 0

Answer:

The maintenance call will be for:

$20,000.

Explanation:

Operating a margin account means that the investor is permitted by her brokerage firm to buy securities with borrowed funds (or the broker's funds).  The maintenance call is the requirement made on the investor with this margin account (by her broker) to raise additional funds to ensure that the margin account is fully funded when it has reduced in value.  The investor with the above margin account is supposed to have a credit balance (equity) of $24,000.

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