You recently purchased 1,300 shares of stock at a cost per share of $54.10. The initial margin requirement on this stock is 60% and the maintenance margin is 30%. The stock is currently valued at $42.30 a share. What is your current margin position?

The current margin position is 48.84%.

Explanation:

This can be calculated as follows:

Margin loan = Number of shares purchased * Cost per share * (1 - Initial margin requirement) = 1,300 * $54.10 * (1 - 60%) = $28,132

Current value of stock = Number of shares purchased * Current price per share = 1,300 * $42.30 = $54,990

Current equity = Current value of stock - Margin loan = $54,990 - $28,132 = $26,858

Current margin position = Current equity / Current value of stock = $26,858 / $54,990 = 0.488416075650118, or 48.8416075650118%

Rounding to 2 decimal places, we have:

Current margin position = 48.84%

Therefore, the current margin position is 48.84%.

the answer should be a)

yes the correct answer was

b.the increased supply will create a surplus.