all about the calculation questions

Question 1

you own 1,000 share of eplace stock. you purchased these shares for $25 per share on margin with a 50% initial margin requirement and a 25% maintenance margin requirement. ePlace stock price dropped to $13 per share. will there be a margin call? if so how much?

a. 1,500
b. 2,750
c. 3,250
d. no margin call required

Margin call

Answer 1

1. loan amount:
   original stock price x (1-Initial Margin)
2. find out the required equity:
   current price x maintenance margin
3. then actual equity
   current price - loan

answer: b

Question 2

Sydney buys a stock for $50 using an initial margin of 75% and a maintenance margin of 40%. at what price will she receive a margin call?

a. $13.12
b. $20.83
c. $25.25
d. $66.67

Answer 2

1. find out the loan amount
   stock price x (1-initial margin)
2. formula
   loan amount / (1-maintenance margin)