You want to purchase GM stock at $40 from your broker using as little of your own money as possible. If initial margin is 50% and you have $4,000 to invest, how many shares can you buy?
A) 100 shares
B) 200 shares
C) 50 shares
D) 500 shares
E) 25 shares

Question

Quizplus · Accepted Answer

With $4,000 and an initial margin requirement of 50%, you can leverage your investment to buy $8,000 worth of stock. At $40 per share, you can buy 200 shares ($8,000 / $40 = 200 shares).

You Want to Purchase GM Stock at $40 from Your