Question
Short Sales (show work) You sold short 1000 shares of J.P Morgan Chase stock (ticker: JPM) at $60 per share. The initial margin is 50%.
Short Sales (show work)
You sold short 1000 shares of J.P Morgan Chase stock (ticker: JPM) at $60 per share. The initial margin is 50%.
a)At what stock price would you receive a margin call if the maintenance margin is 30%? (do not consider dividends in question a)
b)Assume that the JPM stock paid a $0.40 dividend per share each quarter, what is the rate of return if you buy to cover the JPM shares at $39 per share at the end of the quarter?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started
Inside Company Valuation
Authors: Angelo Corelli
1st Edition
3319537822, 9783319537825
