Using a margin account, 691 shares are short sold for $21 per share. The initial margin requirement
Question:
Using a margin account, 691 shares are short sold for $21 per share. The initial margin requirement is 28%. If the price of the stock falls to $17 per share, what is the margin in the account now?
Using a margin account, 416 shares are short sold for $35 per share. The initial margin requirement is 61%. If the price of the stock rises to $59 per share, what is the margin in the account now?
David sells short 3,951 shares of a stock at $143 per share. The initial margin requirement is 26%. The investor earns no interest on funds in the margin account,pays no fees for borrowing shares to short and no dividends are paid on the stock. What is the investor's rate of return after one year if the short sale is covered at $57 per share?
Foundations of Financial Management
ISBN: 978-1259194078
15th edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen