Question
Alec Cela believed Chipotle Mexican Grill (CMG) stock was overpriced at the price of $450. He shorted 10 shares. The brokerage firm required an initial
Alec Cela believed Chipotle Mexican Grill (CMG) stock was overpriced at the price of $450. He shorted 10 shares. The brokerage firm required an initial margin of 55% and a maintenance margin of 40%. The price, however, has been moving against Alecs belief. What is the threshold price above which Alec receives a margin call?
| $498.21 | ||
| $49.82 | ||
| $4.98 | ||
| $4982.10 |
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Financial Management Principles and Applications
Authors: Sheridan Titman, Arthur Keown, John Martin
12th edition
133423824, 978-0133423822
