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

    Solution Summary

    This solution discusses stock declines and margin call.