undefined

Part 1 Attempt 1/3 for 10 pts. What's the minimum amount of money you must contribute to the account to satisfy the initial margin requirement? 33563.16 Correct Assets Liabilities & Equity Sale proceeds (N*Po) 55,939 Value of shares borrowed (N*P) 55,939 Cash 33,563 Equity 33,563 Total 89,502 Total 89,502 We borrow 540 shares and sell them immediately. The value of the shares shows up as both an asset (since we got cash from selling the shares) and a liability (since we owe these shares): Sale proceeds = Value of shares borrowed = N * Po = 540 * 103.59 = 55,939 Since the initial margin is 60%, we have to contribute at least 60% of this amount to the account in the form of additional cash. Assuming that we contribute as little as possible, we contribute the minimum: Contribution = 0.6 * 55,939 = 33,563 This is also the initial dollar margin (or equity) in the account. Part 2 | Attempt 2/3 for 10 pts. If the broker's maintenance margin is 40%, what is the maximum value the stock price can take before you are issued a margin call? 0+ decimals Previous answers: 69