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Question 2. Suppose you wish to short sell 1,025 shares of Tesla stock. Stock price is $249. Your brokeragefirm has an initial margin of 55%
Question 2. Suppose you wish to short sell 1,025 shares of Tesla stock. Stock price is $249. Your brokeragefirm has an initial margin of 55% and maintenance margin of 40%. Assume this is the onlyposition in your brokerage account. Ignore commissions, interest, fees, and taxes.A. If Tesla stock becomes $300/share, will there be a margin call? Show margin formulacalculations & explain.B. If Tesla stock becomes $200/share, will there be a margin call? Show margin formulacalculations & explain.
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