Question
Scottie believed Apple Co. (AAPL) stock was overpriced at the price of $115. She shorted 50 shares. The brokerage firm required an initial margin of
Scottie believed Apple Co. (AAPL) stock was overpriced at the price of $115. She shorted 50 shares. The brokerage firm required an initial margin of 55% and maintenance margin of 30%. The price, however, has been moving against Scotties belief. If AAPL price increases from $115 to $127, how much would Scottie have to deposit in her margin account?
| $137.12 | ||
| $0, because the price hasn't reached the threshold yet. | ||
| $137.12 times 15 | ||
| $(127-115) times 50 |
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Entrepreneurial Finance
Authors: J. Chris Leach, Ronald W. Melicher
7th Edition
0357442040, 978-0357442043
