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Homework answers / question archive / What is the formula for equity in a long margin account? A
What is the formula for equity in a long margin account?
A. Long Market Value + Debit = Equity
B. Long Market Value - Debit = Equity
C. Long Market Value + Credit = Equity
D. Long Market Value - Credit = Equity
The word debit is synonymous with borrowed funds (debt), and market value is synonymous with the asset. Holistically, an investor's asset less the funds the borrowed to buy an asset equals his equity in the investment.
