Question
Ralph sells 200 shares short at 48.50. The stock then goes to $31. The initial margin requirement was 70% and the maintenance margin was 30%.
Ralph sells 200 shares short at 48.50. The stock then goes to $31. The initial margin requirement was 70% and the maintenance margin was 30%.
A. What is the margin at $31?
B. At what price will a margin call occur?
C. If Ralph closes out his position when the stock goes to 31, what was his holding-period return?
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Financial Management Theory And Practice
Authors: Eugene F Brigham, Michael C Ehrhardt
11th Edition
0324259689, 9780324259681
