1
answer
1
watching
1,205
views
14 Jul 2018
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $105 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 $105 to $110.00, and the stock has paid a dividend of $17.00 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 %
Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $105 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 $105 to $110.00, and the stock has paid a dividend of $17.00 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? | ||||
|
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 | % |
Trinidad TremblayLv2
15 Jul 2018