Question
5) If the initial margin is 50%, and you are selling 200 shares short at $30/share, how much money do you have to provide and
5) If the initial margin is 50%, and you are selling 200 shares short at $30/share, how much money do you have to provide and how much is in your account?
6) If the price decreases to $20, what is the margin now?
7) If you close your account one year from now, buying at a price of $20 (assume that margin interest rate was 10% on the initial value of shares borrowed, no interest was earned on cash in your account and a $1/share dividend was paid), what was your rate of return?
8) The maintenance margin is 15%. At what price would you have a margin call (before interest and dividends)?
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