Fixed income instrument

chandniwadhwani92
Finance Junkie
Posts: 166
Joined: Mon Oct 06, 2014 7:36 am

Fixed income instrument

Postby chandniwadhwani92 » Tue Oct 21, 2014 7:00 pm

scheswer 166 page

What does this sentence means?

The margin percentage, The percentage of security value that is owned, vary over the time ad must be maintained at some minimum percentage of market value

edupristine
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Posts: 722
Joined: Wed Apr 09, 2014 6:28 am

Fixed income instrument

Postby edupristine » Thu Oct 30, 2014 5:29 am

When we say "buying a security on margin", it means that out of the total price of the security, some percentage of the cost is paid by the purchaser itself and the rest is paid via loan on which interest is paid by the purchaser of the security.

If for eg 60% of the market value of the security is paid by the purchaser itself and the rest 40% of the price is take as a loan by bank or broker to be paid for buying the security. It means the margin percentage is 60%.


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