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What is the maximum amount of interest you'd be willing to pay? Day 4 closing price is $90. You want to short 100 shares of
What is the maximum amount of interest you'd be willing to pay?
Day 4 closing price is $90.
You want to short 100 shares of H&B's stock which is currently selling for $100. The dealer offers you a short position with an initial margin of 50% BUT with a maintenance margin of 40%. You use all of your funds to meet the initial margin. Suppose you are given knowledge of the stock's future prices, but have to act on it today (when stock is $100). Day 2 Closing Price Day 3 Closing P 110 105 Suppose the rebate rate is zero, but a lender offers to give you the money needed to float your position beyond the close of day 2. What is the maximum amount of interest you would be willing to pay? You want to short 100 shares of H&B's stock which is currently selling for $100. The dealer offers you a short position with an initial margin of 50% BUT with a maintenance margin of 40%. You use all of your funds to meet the initial margin. Suppose you are given knowledge of the stock's future prices, but have to act on it today (when stock is $100). Day 2 Closing Price Day 3 Closing P 110 105 Suppose the rebate rate is zero, but a lender offers to give you the money needed to float your position beyond the close of day 2. What is the maximum amount of interest you would be willing to pay Step by Step Solution
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