PPT Slide

1 100 100 $10,000 $5000 $5000 50%

2 125 100 12,500 5000 7500 60%

+1250 - 1250

125 100 12,500 6250 6250 50%

3 90 100 9,000 6250 2750 30.56%

4 80 100 8,000 6250 1750 21.88%

Sell Stocks: 80 - 28 - 2,240 -2240

80 72 5,760 4010 1750 30.38%

# Total Marginday Price shares Value Borrowings Equity ratio

1,750 beginning total value = $8,000

margin = = 30%. ==> total value = $5,833.33

ratio total value value of stock sold = $2,167

However, $2,167 divided by the price of $80 per share gives 27.09 shares that need to be sold.

Since fractional shares are not normally traded, we must round this to 28 shares.