Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Old Economy Traders opened an account to short-sell 2,400 shares of Internet Dreams at $68 per share. The initial margin requirement was 50%. (The
Old Economy Traders opened an account to short-sell 2,400 shares of Internet Dreams at $68 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $68 to $80, and the stock has paid a dividend of $3.00 per share. a. What is the remaining margin in the account? (Round your answer to the nearest whole dollar.) Remaining margin b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? Yes No c. What is the rate of return on the investment? (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign.) Rate of return %
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started