Question
5 a.) You sell short 100 shares of stock at a price of $80 per share with an initial margin of 50 percent and maintenance
5 a.) You sell short 100 shares of stock at a price of $80 per share with an initial margin of 50 percent and maintenance margin of 25 percent. Show this in a T balance sheet format, and calculate your margin.
Price = 80 | |
Credit for short sale Cash Deposit = | Liability: Market Value of short sale Equity = |
Total Assets = | Liabilities + Equity= |
5 b.) If the price falls to $70 per share, show this in a T balance sheet format, and calculate your margin. Note that you had sold this stock short at $80
Price = 70 | |
Credit for short sale = Cash Deposit = | Liability: Equity = |
Total Assets | Liabilities + Equity = |
5. c. (5 pts) Margin =
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