You've borrowed $10,000 on margin to buy shares in SolarCity, which is now selling at...
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You've borrowed $10,000 on margin to buy shares in SolarCity, which is now selling at $20 per share. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. A day later, the stock price falls to $16 per share. a. Will you receive a margin call? b. How far can the price of SolarCity shares fall before you receive a margin call? Assume that the price drop occurs immediately after you buy the shares
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