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Q: What is the basic margin equation for a long margin account?
A: LMV – DR = EQ Quote: “The basic margin equation is: LMV - DR = EQ.”
Q: What triggers a maintenance call in a long margin account?
A: Equity falling below 25% of LMV.
Quote: “Minimum maintenance requirement = 9,000 (25% × 36,000).”
Q: How do you calculate market value at maintenance in a long account?
A: DR ÷ 0.75 or DR × 4/3. Quote: “This formula… Debit Balance ÷ 0.75… Some people prefer to multiply the debit by 4/3.”
Q: What happens if a maintenance call is not met?
A: The broker‑dealer liquidates securities.
Quote: “If the call is not met promptly, the broker-dealer will liquidate securities…”