Suppose you just bought the new Windoze 8 and that you realize that it is really bad. As a result you are sure that the price of Microsoft stock (currently trading for $31.26) is going to fall and you tell your broker to short 190 shares.

Part 1a.

If the broker's initial margin is 50%, what is the value of personal assets you must add to your account to meet the margin requirement?

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Part 1b.

Assume you have added to your account the value of personal assets determined in part 1. If the broker has a maintenance margin of 30%, what is the highest value the price of Microsoft stock can reach before you are issued a margin call?

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Part 1c.

If the price of Microsoft stock falls to $20, what is the profit you make from the short sale (in $)?

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