Old Economy Traders opened an account to short sell 3,000 sharesof Internet Dreams at $81 per share. The initial margin requirementwas 50%. (The margin account pays no interest.) A year later, theprice of Internet Dreams has risen from $81 to $90, and the stockhas paid a dividend of $3.00 per share.
a. What is the remaining margin in the account?
b. What is the rate of return on the investment?
Old Economy Traders opened an account to short sell 3,000 sharesof Internet Dreams at $81 per share. The initial margin requirementwas 50%. (The margin account pays no interest.) A year later, theprice of Internet Dreams has risen from $81 to $90, and the stockhas paid a dividend of $3.00 per share.
a. What is the remaining margin in the account?
b. What is the rate of return on the investment?
Related questions
25.
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $45 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $45 to $49.50, and the stock has paid a dividend of $5.40 per share.
a. What is the remaining margin in the account?
Remaining margin [ ] $
b-1. What is the margin on the short position? (Round your answer to 2 decimal places.)
Short margin [ ] %
b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?
| Yes | |
| No |
c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return [ ] %
