Question
a) Why does the brokerage firm not disburse the proceeds of a short sale? Why does it require margin payments? b) Suppose, I shorted 100
a) Why does the brokerage firm not disburse the proceeds of a short sale? Why does it require margin payments?
b) Suppose, I shorted 100 shares of GE at $50. How much money do I receive up front? How much money do I need to send to my broker as margin? The company now pays $1 in dividend. To whom does GE send the dividend check? The person I borrowed the shares from or the person I sold the shares to? A year later, GE is trading at $60 at which time I close my short position. Compute my gain/loss. Also, who votes the shares at the annual shareholder meeting? The person I borrowed the shares from or the person I sold the shares to?
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Introduction To Probability And Statistics
Authors: William Mendenhall, Robert Beaver, Barbara Beaver
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1133103758, 978-1133103752
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