You decide to buy 800 shares of stock at a price of $76 and an initial margin of 65 percent. What is the maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 30 percent?

Margin call problem | Business & Finance homework help

The maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 30 percent is 43.75%. This can be calculated by subtracting the maintenance margin from the initial margin (65% – 30%), and then dividing it by the initial margin (35%/65%). The result is 0.53846, which when multiplied by 100 gives us a maximum decline of 43.75%.