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Question 3 Suppose you want to do a short sale of General Motors stock. You short sell 750 shares at $35 per share. Initial margin:

Question 3

Suppose you want to do a short sale of General Motors stock. You short sell 750 shares at $35 per share. Initial margin: 55%. Maintenance margin 35%

  1. If the stock price falls to $15, will there be a margin call? Show work or explain.
  2. If the stock price rises to $70, will there be a margin call? Show work or explain.

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