Question
2 You decide to sell short 100 shares of Singsang Plantation when it is selling at market price of RM56. Your broker tells you
2 You decide to sell short 100 shares of Singsang Plantation when it is selling at market price of RM56. Your broker tells you that your margin requirement is 45%. Required: a) What is your initial margin? b) One you later you buy back Singsang at RM45 to close out your position. While you short the stock, Singsang pays a RM2.50 the dividend. What is your rate of return? At what price you will receive a margin call?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Lets break down each question step by step a Initial Margin Initial Margin Market Price of the stock ...Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get StartedRecommended Textbook for
Investment Analysis and Portfolio Management
Authors: Frank K. Reilly, Keith C. Brown
10th Edition
538482109, 1133711774, 538482389, 9780538482103, 9781133711773, 978-0538482387
Students also viewed these Finance questions
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
Question
Answered: 1 week ago
View Answer in SolutionInn App