Question
Q5. After the analysis, you sell short 500shares of Platform Tech, Co., stock (PLT) at $350 a share.Your broker charges you an interest on the
Q5. After the analysis, you sell short 500shares of Platform Tech, Co., stock (PLT) at $350 a share.Your broker charges you an interest on the borrowed stock at $0.20 per share per day.You also have an initial margin requirement of 50%, and a minimum maintenance margin of 30%.
Q5.1 What istherequiredtotal dollar amount of your initial margin?
Continue with Q5: Assumingyou put up just enough cash as collateral to satisfy initial margin. After 10 days, the stock price rises to $450.
Q5.2 What is your current margin after 10 days?(Hint:calculate yourequityascash positionplusgain/loss, andremember to include interest paid).
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Investing In Financial Research A Decision Making System For Better Results
Authors: Cheryl Strauss Einhorn, Tony Blair
1st Edition
1501732757, 9781501732751
