Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You believe the price of Freeze Frame Co . stock is going to fall, so you short 6 5 0 shares at a price of

You believe the price of Freeze Frame Co. stock is going to fall, so you short 650 shares at a price of $61. The initial margin is 55 percent. Ignore dividends.
a. Construct the equity balance sheet for the original trade. (Input all amounts as positive values.)
\table[[Assets,Liabilities and account equity],[Proceeds from sale,,Short position],[Initial margin deposit,,Account equity],[Total,Total,]]
b-1. Construct equity balance sheets for a stock price of $56 per share. (Input all amounts as positive values.)
\table[[Assets,Liabilities and account equity],[Proceeds from sale,,Short position],[Initial margin deposit,,Account equity],[Total,Total,]]
-2. What is your margin? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places
image text in transcribed

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

Principles Of Financial Management

Authors: Haim Levy, Marshall Sarnat

1st Edition

0137097751, 978-0137097753

More Books

Students also viewed these Finance questions

Question

=+d) Perform the ANOVA and report your conclusions.

Answered: 1 week ago

Question

7 Explain the equity theory of motivation.

Answered: 1 week ago