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IN CLASS ASSIGNMENT Suppose You short sell 500 shares of ABC stock at $25/share Initial margin requirement is 50% and maintenance margin requirement is 40%
IN CLASS ASSIGNMENT Suppose You short sell 500 shares of ABC stock at $25/share Initial margin requirement is 50% and maintenance margin requirement is 40% A year later, stock price increases to $30/share QI. Initially, how much did you supply and how much did you borrow? Create an initial Balance sheet for short sale margin account. Q2. After a year later, what is your new margin? Did you get a margin call? Create a new B/S for this question Q3. What is the EAR on your investment if you cover your position at this price ($30)? Q4.What price per share would lead to a margin call
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