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Nelson's Margin Call: Stock Decline and Margin Call

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Nelson purchased 1,300 shares of stock for $12.75 a share. The initial margin requirement is 70 percent and the maintenance margin is 40 percent. What is the maximum percent by which the stock price can decline before he receives a margin call?

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Solution Summary

This solution discusses stock declines and margin call.

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Answer:

We have,
Shares purchased=1,300
Purchasing price per share=$12.75
Value of the ...

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  • MBA, Indian Institute of Finance
  • Bsc, Madras University
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