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You want to short sell 100 shares of common stock at $70 per share. The initial margin is 50%. a. What is your initial investment?
You want to short sell 100 shares of common stock at $70 per share. The initial margin is 50%. a. What is your initial investment? (4 points) b. Suppose the stock price goes up to $75. What is your % margin at P = $75? If the maintenance margin is 30%, will you receive a margin call? (8 points) c. At what stock price would you receive a margin call if the maintenance margin is 30%? (8 points)
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