Mr. Aley bought 320 shares of Apple at $40 per share; he bought the stock at initial margin of 62%. The stock is now trading at $58.52 per share, and the federal reserve has recently lowered initial margin requirement to 51%. Aley now wants to do a little pyramiding and buy another 320 shares of stock. What is the minimum amount of equity that he will have to put up in this transaction? a. $6,588.96 b. $5,238.53 c. $4,796.27 d. $7,156.52

Mr. Aley bought 320 shares of Apple at $40 per share; he bought the stock at initial margin of 62%. The stock is now trading at $58.52 per share, and the federal reserve has recently lowered initial margin requirement to 51%. Aley now wants to do a little pyramiding and buy another 320 shares of stock. What is the minimum amount of equity that he will have to put up in this transaction? a. $6,588.96 b. $5,238.53 c. $4,796.27 d. $7,156.52

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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