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7. You are bearish on Tesla. You short sell 200 shares of Tesla stock at the market price. (a) If your broker's initial margin requirement
7. You are bearish on Tesla. You short sell 200 shares of Tesla stock at the market price. (a) If your broker's initial margin requirement is 50% of the value of the short position, how much in cash or securities must you put into your brokerage account? (b) If the maintenance margin requirement is 30% of the value of the short position, how high can the price of Tesla stock rise before you get a margin call? (c) Suppose also that at the time you close your short position in Tesla in a year, its price is at $900 per share. What is your holding period return of this particular short sale? (Assuming that you never get a margin call during that time period.)
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