Question
Monica opened an account to short-sell 500 shares of Apple Inc (AAPL). The initial margin requirement is 60%. A year later, the price of Apple
Monica opened an account to short-sell 500 shares of Apple Inc (AAPL). The initial margin requirement is 60%. A year later, the price of Apple Inc (AAPL) has fallen from $18 to $16, and the stock has paid a dividend of $0.25 per share. Monica is paying her broker commission per share 0.5 USD.
a. What is the remaining margin (equity) in Monica's account after the price decrease of Apple Inc (AAPL)?
b. What is the rate of return on the investment?
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Fundamental Accounting Principles
Authors: Larson Kermit, Tilly Jensen
Volume I, 14th Canadian Edition
71051503, 978-1259066511, 1259066517, 978-0071051507
