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IMR = 5 0 % , M M R = 3 0 % Shares = 1 , 0 0 0 Stock Price = 2 5

IMR=50%,MMR=30% Shares =1,000 Stock Price =252.94
How much money did you have to have in your account before you shorted the stock?
=252.94.501,000=126,470.00
Suppose the stock price dropped 20% from the price at which you shorted it. What was the price?
=126,470.20=25,294=126,470-25,294=101,176.00
You closed out the short at the price in Problem 2. What was your net cash inflow?
=126,470.00-101,176.00=25,294.00
What was your return?
5.00039538
If you didn't close out the short, how high could the price go before you got a margin call?
$252.94+($252.940.50) Maximum Price =$378.41
If the price increased 20% from the highest it could go without a margin call, what was the new price? $378.41+($378.410.20) New Price =$454.09
What was your actual margin? $126,470-(1,000$454.09)$126,470100 Actual Margin =36.09%
What was the amount of your margin call? (1,000$454.09)-($126,47030%) Margin Call =$454,090-$37,941 Margin Call =$416,149
Suppose you couldn't meet the margin call. What is the maximum market value you could have? $416,149+$126,470 Maximum Market Value =$542,619
What was the necessary reduction?
Reduction Needed = Maximum Market Value - Value of Stocks
How many shares did your broker buy? Number of shares to sell = Reduction Needed / New Price
What was the actual reduction? Actual Reduction = Number of shares to sell * New Price
What was the value of your total assets after the reduction?
What was the value of your loan after the reduction?
Please help
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