Part II: Short Sales

For questions $6-10,$ use the following information.

You are pessimistic on CBA stock $($current market price $=$$$40$ per share$)$ and you order your broker to sell short $2,000$ shares. The broker requires you to post an initial margin of $50\%$ and a maintenance margin of $30\%$ on short sales. CBA has paid a dividend of $$1$ per share before you covered the short position.

$6.$ What is the initial margin deposit in Dollars?

$7.$ What is the asset balance on your account immediately following the short sale?

$8.$ How high can CBA's price rise before you get a margin call?

$9.$ What would be your rate of return after one year if you repurchase the stock at $$50$ per share? Assume the repurchase price is an ex$-$dividend price.

$10.$ What would be your rate of return after one year if you repurchase the stock at $$30$ per share? Assume the repurchase price is an ex$-$dividend price.