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Please help correct questions that are marked wrong. Suppose that you sell short 1,000 shares of Intel, currently selling for $20 per share, and give
Please help correct questions that are marked wrong.
Suppose that you sell short 1,000 shares of Intel, currently selling for $20 per share, and give your broker $15,000 to establish your margin account. a. If you earn no interest on the funds in your margin account, what will be your rate of return after 1 year if Intel stock is selling at: (i) $22; (ii) $20; (ii) $18? Assume that Intel pays no dividends. (Leave no cells blank be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places. Omit the '%" sign in your response.) ) Rate of return (ii) Rate of return (ii) Rate of return 13.33 % 00% 13.33 0% b. If the maintenance margin is 25%, how high can Intel's price rise before you get a margin call? (Omit the "S" sign in your response.) Margin call will be made at price $ 56 or higher c. Redo parts (a) and (b), but now assume that Intel also has paid a year-end dividend of $1 per share The prices in part (a) should be interpreted as ex-dividend, that is, prices after the dividend has been paid. (Negative values should be indicated by a minus sign. Round your answers to 2 decimal places. Omit the '%" & "$" signs in your response.) ) Rate of return (i) Rate of return (ii) Rate of return 20.00 % 6,67 0 % Margin call will be made at price $27.20or higherStep by Step Solution
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