You want to purchase XON stock at $60 from your broker using as little of your own money as possible.If initial margin is 50% and you have $3,000 to invest, how many shares can you buy?
A)100 shares
B)200 shares
C)50 shares
D)500 shares

Question

Quizplus · Accepted Answer

The initial margin is 50%, so you can borrow 50% of the purchase price from your broker. You have $3,000 to invest, so you can buy $3,000 / 0.50 = $6,000 worth of stock. At $60 per share, you can buy $6,000 / $60 = 100 shares.

You Want to Purchase XON Stock at $60 from Your