Suppose that HP is currently selling at $30 per share. You buy 400 shares using $6500 of your own money and borrowing the remainder of the purchase price from your broker. The rate on the margin loan is 4%. If the maintenance margin is 25%, how low can HP's price fall before you get a margin call?© BrainMass Inc. brainmass.com March 21, 2019, 6:40 pm ad1c9bdddf
Let the cut off price is P then we should have
Actual Margin = Maintenance Margin
Equity/Asset = (P*No. Of ...
Margin Call is assessed for purchase prices.