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Dr. Gregory House observed that SureWins stock is priced at 60 per share. From his analysis, he speculates that the price of the stock will
Dr. Gregory House observed that SureWins stock is priced at 60 per share. From his analysis, he speculates that the price of the stock will eventually fall to 30 per share. Thus, Dr. House gathers that he can make some profit from the price differences through his broker. Given that his broker requires a 30% maintenance margin requirement and using 100 units of SureWins stock:
a) How can Dr. House obtain profit?
b) What is the net profit that Dr. House can obtain after adjusting for a 30% maintenance margin requirement?
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