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You short sell 1000 shares of Internet Dreams. The initial margin requirement is 50%. A year later, the price has risen up from $40 to
You short sell 1000 shares of Internet Dreams. The initial margin requirement is 50%. A year later, the price has risen up from $40 to $50 and the stock has paid a dividend of $3.
a) What is the remaining margin on the account?
b) If the maintenance margin requirement is 30%, will you receive a margin call?
c) What is the rate of return on this investment?
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