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Zorluk: ZorMargin Accounts and Borrowing Requirements

An investor opens a margin account and purchases 300300 shares of a marginable common stock at $25\$25 per share. To satisfy the Regulation T initial margin call, the investor deposits $2,000\$2,000 in cash and intends to cover the remaining requirement by depositing fully paid marginable stock. What is the minimum total market value of marginable stock the investor must deposit to satisfy the remaining margin requirement?

Cevap: 3500 $

Cevap

The investor must deposit fully paid marginable securities with a total market value of $3,500.
Under Federal Reserve Regulation T, the initial margin requirement for purchasing marginable stock is 50% of the purchase price. For a purchase of 300 shares at 25pershare,thetotalpurchasepriceis25 per share, the total purchase price is 7,500, making the initial margin call 3,750.Sincetheinvestordeposits3,750. Since the investor deposits 2,000 in cash, a remaining margin obligation of 1,750incashtermsexists.Fullypaidmarginablesecuritieshavea501,750 in cash terms exists. Fully paid marginable securities have a 50% loan value under Regulation T, so depositing 2 of marginable stock satisfies 1ofcashmarginrequirement.Therefore,theinvestormustdepositsecuritiesworthtwicetheremainingcashcallamount(1 of cash margin requirement. Therefore, the investor must deposit securities worth twice the remaining cash call amount ( 1,750 * 2 = $3,500).

Adım Adım Çözüm

1
Calculate the total purchase value
$7,500
Multiply the number of shares (300300) by the purchase price per share ($25\$25).
2
Determine the Regulation T initial margin requirement
$3,750
Regulation T mandates an initial equity deposit of 50%50\% of the total transaction value (0.50×$7,500=$3,7500.50 \times \$7,500 = \$3,750).
3
Find the remaining margin requirement after the cash deposit
$1,750
Subtract the cash deposited ($2,000\$2,000) from the total initial margin call ($3,750−$2,000=$1,750\$3,750 - \$2,000 = \$1,750).
4
Calculate the market value of fully paid marginable stock needed to satisfy the remaining call
$3,500
Marginable securities have a 50%50\% loan value, meaning $2\$2 in market value of fully paid securities must be deposited for every $1\$1 of cash required ($1,750×2=$3,500\$1,750 \times 2 = \$3,500).

Anahtar Kavram

Satisfying Regulation T margin calls using a combination of cash and fully paid marginable securities.
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Konular

Margin Accounts and Borrowing Requirements