You sell short 100 shares of ABC at $80 a share The initial margin is 50% The cost of borrowing money in the margin account in 5% Ignore cost of borrowing shares The stock pays a dividend of $2 a share The minimum maintenance requirement is 20% | 5) Calculate the price at which you will receive a margin call - base your calculation on the information that is present when you initiate the short sale - hence at time t=0 6) In 2 years the stock rises to $100 a share - what is the annual percentage return on your investment? 7) What is the equity in your account after 2 years and would you have received a margin call before the 2-year time period elapsed? Explain You sell short 100 shares of ABC at $80 a share The initial margin is 50% The cost of borrowing money in the margin account in 5% Ignore cost of borrowing shares The stock pays a dividend of $2 a share The minimum maintenance requirement is 20% | 5) Calculate the price at which you will receive a margin call - base your calculation on the information that is present when you initiate the short sale - hence at time t=0 6) In 2 years the stock rises to $100 a share - what is the annual percentage return on your investment? 7) What is the equity in your account after 2 years and would you have received a margin call before the 2-year time period elapsed? Explain