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Rickety Transport Company has been trying to reinvent ride share in urban areas. The stock has been volatile, but it currently sells for $ 4
Rickety Transport Company has been trying to reinvent ride share in urban areas. The
stock has been volatile, but it currently sells for $ Your research shows that RTCs
cost structure cannot compete with Uber and you recommend shorting the stock.
a You sell short shares. How much margin do you have to post initially?
b After you sold the stock, a rumor spreads that lyft is interested in RTCs
operation and the stock moves up At what point would you get a margin call if
the Maintenance Margin is
c The talks with Lyft break down and RTC stock resumes its precipitous fall. You
decide to close out your position when the stock hits $ What is your return on
this trade, ignoring any dividends?
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