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You are bearish on Ali babas stock and decide to sell short 100 shares at the current market price of $60 per share. a. How
You are bearish on Ali babas stock and decide to sell short 100 shares at the current market price of $60 per share. a. How high can the price of the stock go before you get a margin call if the maintenance margin is 35% of the value of the short position? b. Assume a year later the price of Ali Babas stock risen from $50 to $60 and the stock has paid a dividend of $2.5 per share. What is the rate of return from Ali Babas stock?
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