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Before proceeding with the limit sell order, you remind Kevin that such a position is highly risky. Therefore, your bank will create a margin account
Before proceeding with the limit sell order, you remind Kevin that such a position is highly risky. Therefore, your bank will create a margin account on which Kevin will have to put $300. You warn Kevin that if the price of Stock A goes above $7.0, it will trigger a margin call.
a) What is the initial shorting margin of such a transaction?
b) What is the maintenance shorting margin of such a transaction?
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