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Kai has $25,000 in his margin account. His broker pays 1% (continuously compounded) interest on cash balances. Kai sells 100 shares of JASA short at
Kai has $25,000 in his margin account. His broker pays 1% (continuously compounded) interest on cash balances. Kai sells 100 shares of JASA short at $175 / share. The broker charges commission of $0.01 per share, and charges 0.25% (cont. compounded) interest on the value of the stock loan. How much cash is in Kai's account immediately after the short sale? a. $25,000 b. $17,499 c. $42,500 d. $42,499 e. $17,500
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