Suppose an investor wants to buy 100 shares at a $100 per share, that is $10,000 worth of stock. She has $6,000 and finances her investment by borrowing the remaining 4,000 from a broker.
a) Find the initial percentage margin
b) How much is the percentage margin going to be, if the price declines to $70 per share?
c) How much is the percentage margin going to be, if the price declines to $39 per share?