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New Economy Traders opened an account to short sell 2,500 shares of Internet Hopes plc. The...

New Economy Traders opened an account to short sell 2,500 shares of Internet Hopes plc. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Hopes plc. has risen from £70 to £80, and the stock has paid a dividend of £3.5 per share. i) What is the remaining margin in the account? ii) If the maintenance margin requirement is 30%, will New Economy receive a margin call? iii) What is the rate of return on the investment?

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