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Hugo is interested in the XYZ stock. He finds that the price should be $3, but the market price is $5 per share now. Hugo
Hugo is interested in the XYZ stock. He finds that the price should be $3, but the market price is $5 per share now. Hugo has $2, O00 in his margin account. The initial margin requirement is 40%, and the maintenance margin is 30%. Assume there are no interests and service charges. (a) Hugo decides to short sell the XYZ stock, but he does not have more money to deposit to his margin account. Then, how many shares can he short? to \$4. What is the margin now? short position. Then how much is left in his margin account? More than or less than his initial funds? Can you provide any intuition for your
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