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help, plz Q1 (15 marks) Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams from the previous question. The initial margin
help, plz
Q1 (15 marks) Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams from the previous question. The initial margin requirement was 50%. (The margin account pays interest at 6%, APR) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share. a. What is the remaining margin in the account? (5 marks) b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? (5 marks) c. What is the rate of return on the investment? (5 marks) Q1 (15 marks) Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams from the previous question. The initial margin requirement was 50%. (The margin account pays interest at 6%, APR) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share. a. What is the remaining margin in the account? (5 marks) b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? (5 marks) c. What is the rate of return on the investment Step by Step Solution
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