Answered step by step
Verified Expert Solution
Link Copied!

Question

00
1 Approved Answer

Last week, Matt shorted 200 shares of Pirate stock at $20 per share at an initial margin of 80 percent in his new account; the

image text in transcribed

Last week, Matt shorted 200 shares of Pirate stock at $20 per share at an initial margin of 80 percent in his new account; the stock has since increased and closed at $25 per share today. In spite of the recent spike, and Matt's restricted margin account status, Matt still thinks the price of Pirate stock will fall. To be prudent, however, he wants to calculate the share price that will trigger margin call if the price continues rising. What stock price (to the penny) will trigger his margin call?| Last week, Matt shorted 200 shares of Pirate stock at $20 per share at an initial margin of 80 percent in his new account; the stock has since increased and closed at $25 per share today. In spite of the recent spike, and Matt's restricted margin account status, Matt still thinks the price of Pirate stock will fall. To be prudent, however, he wants to calculate the share price that will trigger margin call if the price continues rising. What stock price (to the penny) will trigger his margin call?|

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Engineering Economy

Authors: William G. Sullivan, Elin M. Wicks, C. Patrick Koelling

15th edition

978-0132554909

Students also viewed these Finance questions