Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

please show work Oid Economy Traders opened an account to short-sell too0 shares of internet Dreams at $30 per share. The inital margin requirement was

please show work
image text in transcribed
image text in transcribed
Oid Economy Traders opened an account to short-sell too0 shares of internet Dreams at $30 per share. The inital margin requirement was 50K. (The margin account pors no interest) A year latec, the price of Internet Dreams has risen from $30 to $38.50. and the stock has paid a dividend of $2.40 per share. Pequired: a. What is the remaining margin in the account? b-1. What is the margin on the short position? (Round your answer to 2 decimat places.) b.2. If the maintenance margin requirement is 30%, will Oid Economy recetie a margin call? Yes c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)

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

Risk Sensitive Investment Management

Authors: Mark H A Davis, Sébastien Lleo

1st Edition

9814578037, 978-9814578035

More Books

Students also viewed these Finance questions

Question

Describe new developments in the design of pay structures. page 475

Answered: 1 week ago