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You short-sell 100 shares of ABC Co. at a price of $50 per share. Your broker demands a maintenance margin of 25%. Your are using
- You short-sell 100 shares of ABC Co. at a price of $50 per share. Your broker demands a maintenance margin of 25%. Your are using minimum maintenance margin. The price has increased to $65. What is the loss of the broker? (Ignore fees. Negative means loss.
$(50-65)(1-25%)100
$(50-65)25%100
$0
$(50-65)25%100
Please provide a detailed explanation.
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Private Equity Value Creation Analysis Volume I
Authors: Michael David Reinard
1st Edition
1736077821, 978-1736077825
