Finance 421 (Towner) - Homework 4 Due Monday 10/29/2018 Name: Problem 1: Short-sales and collateral (3 points) Consider a portfolio consisting of a short position in 200 shares of stock "ABC" and the necessary collateral. ABC's per-share price is $40. The proceeds from shorting these shares, along with the 50% margin requirement, are invested at the risk-free rate and used as col- lateral for the share lender. a) How much cash do you receive from the short-sale? Cash from short-sale: 1 point) (b) Including the cash received from the short-sale and the additional margin required, what is the dollar value of the risk-free investment that is being used as collateral? Value of risk-free investment:(1 point) (c) What is the total market value of your combined portfolio, consisting of both the short position in ABC and the collateral, right after the short sale is completed? Value of portfolio: 1 point) Finance 421 (Towner) - Homework 4 Due Monday 10/29/2018 Name: Problem 1: Short-sales and collateral (3 points) Consider a portfolio consisting of a short position in 200 shares of stock "ABC" and the necessary collateral. ABC's per-share price is $40. The proceeds from shorting these shares, along with the 50% margin requirement, are invested at the risk-free rate and used as col- lateral for the share lender. a) How much cash do you receive from the short-sale? Cash from short-sale: 1 point) (b) Including the cash received from the short-sale and the additional margin required, what is the dollar value of the risk-free investment that is being used as collateral? Value of risk-free investment:(1 point) (c) What is the total market value of your combined portfolio, consisting of both the short position in ABC and the collateral, right after the short sale is completed? Value of portfolio: 1 point)