Question

Assume that you short 100 shares of a stock at $50/share, and there is a 50%...

Assume that you short 100 shares of a stock at $50/share, and there is a 50% initial margin. Now the price is at $35. What is your new margin percentage? What is your dollar return? Will there be a margin call?

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Suppose that you just short sold 100 shares of Quiet Minds stock for $67.00 per share....
Suppose that you just short sold 100 shares of Quiet Minds stock for $67.00 per share. a. If the initial margin requirement is 50%, how much equity must you invest? (Round your answer to the nearest dollar) Equity            $ b. Construct the balance sheet that corresponds to the transaction. Assets Liabilities and Equity Stock $ Short position (100 shares) $ T-bills $ Equity $ Total assets $ Total liabilities and equity $ c. Now suppose the price of the stock...
You short-sell 50 shares of XYZ stock at $100 per share. Your broker's initial margin requirement...
You short-sell 50 shares of XYZ stock at $100 per share. Your broker's initial margin requirement is 50% of the value of your short position. You put up cash to satisfy the initial margin requirement. a) What will be your rate of return (after 1 year) if XYZ stock sells at $110 a share? Assume that you do not earn any interest on your funds in the margin account and that the stock pays a dividend of $1.50 a share...
You sell 100 short shares of stock at $60 per share. Initial Margin Requirement (IMR%)= 50%....
You sell 100 short shares of stock at $60 per share. Initial Margin Requirement (IMR%)= 50%. Maintenance margin for short sale of stock with price > $16.75 is 30% of market (or position) value QUESTIONS: 1. What is the price for margin call?   2. What is the new market value of the position?(Note: we haven’t deposited any add’l cash yet)
12A) You short-sell 100 shares of Tuckerton Trading Co., now selling for $44 per share. What...
12A) You short-sell 100 shares of Tuckerton Trading Co., now selling for $44 per share. What is your maximum possible gain, ignoring transactions cost? Multiple Choice $44 $56 unlimited $4,400 12B)You’ve borrowed $30,222 on margin to buy shares in Ixnay, which is now selling at $43.8 per share. You invest 1,380 shares. Your account starts at the initial margin requirement of 50%. The maintenance margin is 35%. Two days later, the stock price changes to $54 per share. a. Will...
3.) Short Sale with Margin You open a brokerage account and plan to short 100 shares...
3.) Short Sale with Margin You open a brokerage account and plan to short 100 shares at $1,641.00/share. 1. How much equity (cash) must you deposit in your account in order to execute this trade (assume a 50% initial margin requirement). 2. If the required margin is 25% at what price will you receive a margin call? 3. If the stock price falls to $1400 and you cover your short how much did you make on the trade in dollar...
You purchased 100 shares of common stock on margin at $40 per share. Assume the initial...
You purchased 100 shares of common stock on margin at $40 per share. Assume the initial margin is 50% and the stock pays no dividend. What would the maintenance margin be of a margin call is made at a stock price of $25? Ignore interest on margin. Make sure that you interpret your numerical answer (i.e. explain why would you get the call at this rate).
You short-sell 400 shares of XYZ Co., now selling for $100 per share. You post the...
You short-sell 400 shares of XYZ Co., now selling for $100 per share. You post the 50% margin required on the short sale. If the share price falls to $90 per share and you close your short position, what is your holding-period return on the transaction? (Assume the stock pays no dividends, and there is no interest paid on the posted margin.)
You just bought 200 shares of a stock priced at $48 per share using 50% initial...
You just bought 200 shares of a stock priced at $48 per share using 50% initial margin. The broker charges 4% annual interest rate on the margin loan and requires a 30% maintenance margin.  One year later stock price dropped to 31 and you recieved margin call, to restore your margin to the initial margin level, how much would you need to deposit? Answer ___+/- ____ You sell short 100 shares of company A which are currently selling at $32 per...
You purchased 100 shares of common stock on margin at $45 per share. Assume the initial...
You purchased 100 shares of common stock on margin at $45 per share. Assume the initial margin is 50% and the stock pays no dividend. What would the maintenance margin be if a margin call is made at a stock price of $30? Ignore interest on margin. A.0.33 B.0.55 C.0.43 D.0.23 E.0.253. Assume you purchased 200 shares of GE common stock on margin at $70 per share from your broker. If the initial margin is 55%, how much did you...
You purchased 3000 shares of Microsoft common stock on margin at $80 per share. Assume the...
You purchased 3000 shares of Microsoft common stock on margin at $80 per share. Assume the initial margin is 70%, and the maintenance margin is 30%. What will be your initial position? If the share price falls below to $50 per share, what will be your new position and percentage of margin?
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT