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Old Economy Traders opened an account to short-sell 1,000 shares of Disney from the previous question. The initial margin requirement was 50%. A year later, the price of Disney has risen from $40 to $50. 3. a. What is the remaining margin in the account? b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? C. What is the rate of return on the investment?

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Home nert Page Layout Formulas Data Review View dd-Ins as Cut aCopy AutoSum Fill 11.A. A.--- 9- ー E ゴText ずWrap Text General Paste Format Painter B l U. -...Δ.-=-- Merge & Center. $ , % , , 8- Conditional Format Cell Insert Delete Format 2 ClearFe Select Edting as Table Styles Clipboard CK195 CJ Alignment Number Cells CK CL cr) CP cQ CR CS CT CU 188 189 190 191 192 193 194 195 196 197 198 199 200 201 202 203 204 205 206 OLD ECONOMY TRADER VALUE OF SHARES SHORTED INITIAL MARGIN DEPOSIT (50%)-OWN FUNDS TOTAL ASSETS 40000 (1000x 40) 20000 PRICE RISES TO 50 COST OF COVERING SHORT 1000X50 50000 VALUE OF EQUITY-REMAINING MARGIN TOTAL ASSETS COST OF COVERING SHORT VALUE OF EQUITY 60000 -50000 10000 MARGIN BALANCE VALUE OF EQUITY/COST OF COVERING SHORT MARGIN BALANCE-10000/50000 = 20.00% YES, THERE IS A MARGIN CALL MARGIN BALANCE IS LOWER THAN MAITENANCE MARGIN (3096) RATE OF RETURN ON INVESTMENT = (REMAINING MARGIN-OWN FUNDS)/OWN FUNDS * 100 RATE OF RETURN ON INVESTMENT (10000-20000)/20000 50.00% e quote EVA M AT 福 130% 키 HIGH LOW TARGET PRICE . STOCK DI NAV HEDGE FUND MF E PE EPS DIV ABNORMAL . APV ROSS debek MARGIN MONEY marg nal t x PB ROPI 28-01-2019

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