You are bearish on Telecom and decide to sell short 100 shares at the current market price

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You are bearish on Telecom and decide to sell short 100 shares at the current market price of $50 per share.

a. How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position?

b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position?

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Investments

ISBN: 9780073530703

9th Edition

Authors: Zvi Bodie, Alex Kane, Alan J. Marcus

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Question Posted: Jan 04, 2013 08:09 AM

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You are bearish on Telecom and decide to sell short 100 shares at the current market price

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a Initial margin is 50 of 5000 or 2500 b Total asset...View the full answer

Investments

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