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please show all steps and give correct answer 1. A trader opened an account to short-sell 1,000 shares of Internet Dreams at $75 per share.
please show all steps and give correct answer
1. A trader opened an account to short-sell 1,000 shares of Internet Dreams at $75 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 $75 to $89.50, and the stock has paid a dividend of $11.00 per share. The maintenance margin requirement is 30%. a) How much is the current percentage margin? b) What is the rate of return on the investment? c) Ignoring dividend, what's the cutoff stock price that would trigger a margin call Step by Step Solution
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