Intro

The stock price of Tesla is $$575.$ Your broker charges a rate of $0\mathrm{.}6\%$ on borrowed shares.

Attempt $1/3$ for $10$ pts$.$

Part $1$

You think the stock price will go down soon, and want to short $59$ shares. If the initial margin is $50\%,$ what is the minimum additional dollar amount that you have to deposit from your own funds to your brokerage account?

$16962\mathrm{.}5$

Correct $$

Short$-$selling $59$ shares gives us some cash, which must be kept in the brokerage account:

Proceeds from short$-$selling $=$ Number of shares $*$ Stock price

$=59*575$

$=33,925$

With an initial margin requirement of $50\%,$ we have to add $50\%$ of the proceeds from short$-$selling in the form of additional cash to the account:

Extra cash $=50\%*33,925=16,963$

Attempt $2/3$ for $8$ pts$.$

Part $2$

Three months later, the stock price is $$605.$ Tesla paid a dividend of $$8$ per share during the three months you were short. What is your percentage margin $($entered as a decimal number$)$ at the end of three months?