In Bodie, Kane and Marcus, the term "initial margin percentage" seems to be used synonymously to "margin", which is the equity to total investment ratio (where total investment amount = equity + amount borrowed). Is this the case in actual finance?


Reg T margin for initial purchases in the USA is 50% (brokers can require more). It is referred to as "initial margin" or simply "margin".

Buying Power = (Cash or Marginable Securities) / (Margin Rate)

(Market Value) - (Debit Balance) = Equity

Current Margin = Equity / (Market Value)

There are different calculations for Minimum Margin Maintenance Requirement as well as for Selling Short on margin.

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