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9 April, 07:46

Carson Corporation stock sells for $32 per share, and you've decided to purchase as many shares as you possibly can. You have $56,000 available to invest. What is the maximum number of shares you can buy if the initial margin is 60 percent?

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  1. 9 April, 11:40
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    2,917 shares

    Explanation:

    The maximum number of shares that can be bought from Carson Corporation will be computed as follows:

    Maximum investment = (Funds available to invest / initial margin)

    Maximum investment = $56,000 / 0.6 = $93,333

    Number of shares = Maximum Investment / price per share

    Number of shares = $93,333 / $32

    = 2,917 shares
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