Question
Heyam sold short 300 shares of common stock at $56 per share. The initial margin is 60%. The maintenance margin is 35%. What is the
Heyam sold short 300 shares of common stock at $56 per share. The initial margin is 60%. The maintenance margin is 35%.
What is the value equity at time period 0?
Answer for part 1
At what stock price would Heyam receive a margin call?
Answer for part 2
Would Heyam peruse a short sell strategy when her expectations about the stock are bearish or bullish?
Please write 1 in the box if your answer is bearish and write 2 if your answer bullish.
Answer for part 3
If Heyam closed her short position when the stock price was 48. What is the rate of return on the short position?
Answer for part 4
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