You buy 300 shares of Qualitycorp for $30 per share and deposit initial margin of 50%. The next day Qualitycorp's price drops to $25 per share. What is your actual margin

40%

Explanation:

Initial margin is the the amount of liability given by the lender initially.

Actual margin is the at a specific time current value of a collateral less any liability to the lender.

Total purchase value = 300 x $30 = $9,000

Initial Margin value = $9,000 x 50% = $4,500

Today's value = 300 x $25 = $7,500

Remaining value = $7,500 - $4,500 = $3,000

Actual Margin is the remaining value as compared to current value of the collateral

Actual Margin = Remaining Margin / Today's value = $3,000 / $7,500 = 0.40

Actual Margin = 40%

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