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BRIDGEWATER S Take-Home Problem Set #1 Summer 2019 You sell short 200 shares of the common stock of DeVito Taxi Co. at $50 per share.

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BRIDGEWATER S Take-Home Problem Set #1 Summer 2019 You sell short 200 shares of the common stock of DeVito Taxi Co. at $50 per share. The initial margin is 60% and the maintenance margin on your account is 30%. After one month, the market price of the stock is $45 per share. After one year, the market price is $35 per share. 4. What is the required amount of your initial investment? (3 points) a. b. After one month, will you be subject to a margin call? Explain. (3 polnts) Ignoring interest on your borrowings, what is your return after one C. year? (3 points) Ignoring interest on your borrowings, what is your return after one year assuming the stock paid a $2 per share dividend during the first year of your investment? (3 points) d

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