Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Suppose you sell short 1000 shares of Xtel, currently selling at $50 per share, and give your broker 50% initial margin to establish your margin

Suppose you sell short 1000 shares of Xtel, currently selling at $50 per share, and give your broker 50% initial margin to establish your margin account. If you earn no interest on the funds in your margin account and if the maintenance margin is 25%, how high can Xtels price rise before you get a margin call?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Fundamentals Of Corporate Finance

Authors: Stephen A Ross, Randolph W Westerfield, Bradford D Jordan

7th Edition

0073134295, 9780073134291

More Books

Students also viewed these Finance questions

Question

Salary (if known)

Answered: 1 week ago

Question

5. How can I help others in the network achieve their goals?

Answered: 1 week ago