Question: Laurn has a margin account and deposited $50,000. Assume the prevailing margin requirement is 40 percent, commissions are ignored, and Gentry Shoe Corporation is selling at $35 per share.
Q1. How many shares can Laurn purchase using the maximum allowable margin?
Q2. What is Laurn's profit (loss) if the price of Gentry's stock i-rises to $45 ii-falls to $25
Q3. If the maintenance margin is 30 percent, to what price can Gentry shoe fall before Laurn will receive a margin call?