3. Stock Price Drops: o The price of the stock drops by 25%. Now, the value of your stock is $15,000
3. Stock Price Drops:
o The price of the stock drops by 25%. Now, the value of your stock is $15,000.
4. Equity Calculation:
o The equity in your margin account is: Equity=Current Value of Investments−Loan Amount=15,000−10,000=5,000\text{Equity} = \text{Current Value of Investments} – \text{Loan Amount} = 15,000 – 10,000 = 5,000Equity=Current Value of Investments−Loan Amount=15,000−10,000=5,000