Question : Margin requirement =
Option 1: Current value of the security offered for loan – Value of loan granted
Option 2: The current value of the security offered for the loan + the Value of the loan granted
Option 3: The current value of the security offered for loan * Value of loan granted
Option 4: The current value of the security offered for the loan / Value of loan granted
Correct Answer: Current value of the security offered for loan – Value of loan granted
Solution : The correct answer is (a). Current value of the security offered for loan – Value of loan granted
The margin requirement is calculated by subtracting the value of the loan granted from the current value of the security offered for the loan. This calculation determines the amount of equity or collateral that the borrower must provide in relation to the loan amount.
