Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

On Sep 19th, you sold short 5,200 shares of stock A at $156 per share. Your initial margin requirement is 50 percent. Assuming there was

On Sep 19th, you sold short 5,200 shares of stock A at $156 per share. Your initial margin requirement is 50 percent. Assuming there was no commission and interest fees and no dividends. After two weeks, Stock A's price went up to $190 per share, and you received a margin call from the broker. If you close your position what would be your return? How much additional cash must be put in to maintain the margin at 40 percent?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Managing Currency Options In Financial Institutions

Authors: Yat-Fai Lam, Kin-Keung Lai

1st Edition

1138778052, 978-1138778054

More Books

Students also viewed these Finance questions

Question

1.45%*65000=

Answered: 1 week ago

Question

3. Explain the forces that influence how people handle conflict

Answered: 1 week ago