1. What is your initial margin? *

a. $1,500

b. $2,500

c. $3,000

d. $5,000

e. None of the above

2. What is your ending margin in this short sell position after 1 year? *

a. $1,100

b. $1,500

c. -$1,000

d. -$1,500

e. None of the above

3. At $30 stock price, will Loyal Broker send you a margin call? *

a. No, since the maintenance margin is less than the margin rate

b. No, since the maintenance margin is more than the margin rate

c. Yes, since the maintenance margin is less than the margin rate

d. Yes, since the maintenance margin is more than the margin rate

e. None of the above

4. How much additional money do you need to deposit in order to maintain your position open? *

a. $1,500

b. $700

c. $800

d. $1,150

e. None of the above

You are expecting LSP stock price to decrease during the next year. The stock is trading now at $25 per share and you have just sold 200 shares using the short sell technique. Loyal Trading Company, the broker you deal with, sets the following margin requirements: Margin Requirement rates Initial 50% Maintenance 30% One year after you entered this short position, LSP stock price increased to $30 per share. Regularly, LSP pays $2 per share as dividend at the end of the year. You are expecting LSP stock price to decrease during the next year. The stock is trading now at $25 per share and you have just sold 200 shares using the short sell technique. Loyal Trading Company, the broker you deal with, sets the following margin requirements: Margin Requirement rates Initial 50% Maintenance 30% One year after you entered this short position, LSP stock price increased to $30 per share. Regularly, LSP pays $2 per share as dividend at the end of the year