Margin Accounting for Stocks: an Excel Classroom Exercise

17 Pages Posted: 20 Apr 2006

See all articles by Tom Arnold

Tom Arnold

University of Richmond - E. Claiborne Robins School of Business

Date Written: March 6, 2007

Abstract

This paper illustrates the mechanics of buying stock on margin with the ability to account for buying or selling more of the same stock as the price changes (assuming one uses the same broker). This latter component allows the student to see how the margin set for stock purchases at different prices interact. Further, it is very easy to demonstrate how margin calls become frequent when a stock price plummets. This compliments much of what is now being taught with trading simulation software and student managed funds.

Keywords: Margin, Student-managed Funds, Excel, Pedagogy

JEL Classification: G10

Suggested Citation

Arnold, Thomas M., Margin Accounting for Stocks: an Excel Classroom Exercise (March 6, 2007). Available at SSRN: https://ssrn.com/abstract=897272 or http://dx.doi.org/10.2139/ssrn.897272

Thomas M. Arnold (Contact Author)

University of Richmond - E. Claiborne Robins School of Business ( email )

1 Gateway Drive
Richmond, VA 23173
United States
804-287-6399 (Phone)
804-289-8878 (Fax)

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