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6. Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams from the previous problem. The initial margin requirement was 50%.

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6. Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams from the previous problem. The initial margin requirement was 50%. (The margin account pays no Inter- est.) A year later , the price of Internet Dreams has risen from $40 tq 850, and the stock has palda dividend of S2 per share. a What is the remaining margin in the account? h If the maintenance margin requirement is 30%, will Old Economy receive a margin call? What is the rate of return on the investment? 7. Do you think it is possible to replace market-making specialists with a fully automated, comput- erized trade-matching system

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