Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You short sell 5 0 0 shares of Yahoo stock at a price of $ 2 3 per share, using the full initial margin of

You short sell 500 shares of Yahoo stock at a price of $23 per share, using the full initial margin of 55%. After a surprisingly positive earnings announcement, the stock price rises to $31 per share. Your broker immediately gives you a margin call and requests that you add additional cash to your position to get back to the required maintenance margin level of 35%. How much cash do you need to add to your account?
$3100
$4237
$2500
$3879
Position still above

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_2

Step: 3

blur-text-image_3

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

Urban Public Finance

Authors: D. Wildasin

1st Edition

0415851882, 978-0415851886

More Books

Students also viewed these Finance questions

Question

state what is meant by the term performance management

Answered: 1 week ago