You are interested in selling 1000 shares of Great Corporation short. The initial margin is 50% and the maintenance marg
Posted: Sat Nov 27, 2021 5:17 pm
You are interested in selling 1000 shares of Great Corporation
short. The initial margin is 50% and the maintenance margin is 30%.
You sell the shares at $xx per share (xx is the last two digits of
your student ID number, if the last two digits are 00, use 100). i)
How much money do you have to add to your account and how much
money is in your account in total? ii) At what price will you get a
margin call? iii) If the price of the stock immediately increased
by 15%, and you bought it back at that price, what would be the
rate of return on your investment (assume no fees or interest
costs)?
Notes: • Include the following information in your answer o The
initial price of the stock o The amount of money you add to your
account o The total amount in your account at the start o The
amount you lose o The rate of return of your investment
short. The initial margin is 50% and the maintenance margin is 30%.
You sell the shares at $xx per share (xx is the last two digits of
your student ID number, if the last two digits are 00, use 100). i)
How much money do you have to add to your account and how much
money is in your account in total? ii) At what price will you get a
margin call? iii) If the price of the stock immediately increased
by 15%, and you bought it back at that price, what would be the
rate of return on your investment (assume no fees or interest
costs)?
Notes: • Include the following information in your answer o The
initial price of the stock o The amount of money you add to your
account o The total amount in your account at the start o The
amount you lose o The rate of return of your investment