Question
Teds Corporation stock is selling for $50 per share. Ted pays no dividends. Initial margin requirements are 50%, and maintenance margin requirements are 30%. You
Teds Corporation stock is selling for $50 per share. Ted pays no dividends. Initial margin requirements are 50%, and maintenance margin requirements are 30%. You can borrow from your broker at 7% per year on margin debt, but the broker pays nothing on cash balances. Assume for the purposes of these questions (unrealistically, of course) that there are no brokerage commissions. There is nothing else in your account. c. If instead you choose to SELL SHORT 200 shares of TED at $50, What is the smallest check you can write according to regulations as they currently exist?
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