3.7.2.4. Buying Power
When an SMA is created, it increases the buying power of an account. Whatever the value of an SMA, the buying power is twice this amount because the investor can purchase twice this value in securities.
SAMPLE QUESTION
Rodney opened a margin account last year. He bought 100 shares of XYZ at $50 per share on margin. The price of the shares increased to $60 per share and now has decreased to $55 per share. What is the current value of