Question
Bill Trader opened an account to sell short 1000 shares of BBQ Wholesalers. The initial margin requirement was 50% (interest-free). A year later, the share
Bill Trader opened an account to sell short 1000 shares of BBQ Wholesalers. The initial margin requirement was 50% (interest-free). A year later, the share price has gone from $40 to $50, and the company has paid a dividend of $2.00 per share.
What is the remaining margin in the account?
If the maintenance margin requirement is 30%, will Bill Trader receive a margin call?
What is the rate of return on the investment?
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Focus On Personal Finance
Authors: Jack R. Kapoor, Les R. Dlabay Professor, Robert J. Hughes, Melissa Hart
5th Edition
0077861744, 978-0077861742
