Question $3$

Suppose you wish to short sell $2,500$ shares of Nvidia stock. Stock price is $$116.$ Your brokerage

firm has an initial margin of $55\%$ and maintenance margin of $40\%.$ Assume this is the only

position in your brokerage account. Ignore commissions, interest, fees, and taxes.

A$.$ If Nvidia stock immediately becomes $$150/$share $($from $$116),$ will there be a margin

call? Show margin formula calculations & explain.

B$.$ If Nvidia stock becomes $$\frac{90}{?}$ share $($from $$116),$ will there be a margin call? Show margin

formula calculations & explain.