Ina purchased 800 shares of Detroit Motors stock at a price of $55 a share. The initial margin requirement is 65 percent and the maintenance margin is 30 percent. The effective interest rate on the margin loan is 4.69 percent.
How much margin interest will she pay if she repays the loan in seven months?
The interest that is due on the loans which have been transacted between the individual and the broker managing the portfolio of assets is known as the margin interest.
Answer and Explanation:
- Number of shares = 800
- Price per share = $55
- Initial margin requirement = 65%
- Maintenance margin = 30%
- Effective interest rate =...
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from Intro to Business: Help and ReviewChapter 24 / Lesson 8