Answer:
Federal Reserve will require Stephen to pay $7,280 in cash for this purchase
Explanation:
There is a legal requirement from the federal that for an investor to deposit 50% cash of the purchase of shares / securities value in the margin account. It is called the margin requirement.
Purchase Value = Number of shares x Price per share
Purchase Value = 700 shares x 20.8
Purchase Value = $14,560
Inityial Margin Requirement = $14,560 x 50% = $7,280
