es of stock at a price of $35 and an initial margin of 70 percent. If...

Question

Question

Answer 1

Answer #1

Proceeds from short sale = 650*$35 = $22,750

Initial deposit = $22,750 * 70% = $15,925

Account value = $22,750 + 15,925 = $38,675

Margin call price = $38,675 / [650 + (0.40 × 650)] = $42.50

Account equity = $38,675 – (650 × $42.50) = $11,050

Answer 2

Similar Homework Help Questions

You short sold 650 shares of stock at a price of $35 and an initial margin...

You short sold 650 shares of stock at a price of $35 and an initial margin of 70 percent. If the maintenance margin is 40 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin call price Account equity
You short sold 350 shares of stock at a price of $32 and an initial margin...

You short sold 350 shares of stock at a price of $32 and an initial margin of 60 percent. If the maintenance margin is 30 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin call price Account equity
You short sold 1,200 shares of stock at a price of $30 and an initial margin...

You short sold 1,200 shares of stock at a price of $30 and an initial margin of 75 percent. If the maintenance margin is 30 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin call price Account equity 2 decimal places required.

Problem 2-9 Margin Calls on Short Sales (LO4, CFA5) You short sold 600 shares of stock...

Problem 2-9 Margin Calls on Short Sales (LO4, CFA5) You short sold 600 shares of stock at a price of $37 and an initial margin of 80 percent. If the maintenance margin is 40 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Do not round intermediate calculations. Round your answers to 2 decimal places.) Margin call price Account equity
Check my work You short sold 1,100 shares of stock at a price of $38 and...

Check my work You short sold 1,100 shares of stock at a price of $38 and an initial margin of 65 percent. If the maintenance margin is 40 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Do not round intermediate calculations. Round your answers to 2 decimal places.) points Margin call price Account equity eBook Print
You buy 700 shares of stock at a price of $88 and an initial margin of...

You buy 700 shares of stock at a price of $88 and an initial margin of 70 percent. If the maintenance margin is 30 percent, at what price will you receive a margin call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Margin call price

The stock of Flop Industries is trading at $52. You feel the stock price will decline,...

The stock of Flop Industries is trading at $52. You feel the stock price will decline, so you short 450 shares at an initial margin of 70 percent. If the maintenance margin is 35 percent, at what share price will you receive a margin call? (Do not round intermediate calculations. Round your answer to 2 decimal places.) Margin call price
You decide to buy 900 shares of stock at a price of $78 and an initial...

You decide to buy 900 shares of stock at a price of $78 and an initial margin of 70 percent. What is the maximum percentage decline in the stock price before you will receive a margin call if the maintenance margin is 40 percent? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) price decline
You decide to buy 1,400 shares of stock at a price of $88 and an initial...

You decide to buy 1,400 shares of stock at a price of $88 and an initial margin of 70 percent. What is the maximum percentage decline in the stock before you will receive a margin call if the maintenance margin is 35 percent? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places. Do not include a minus sign. Omit the "%" sign in your response.) Stock price decline %

The stock of Flop Industries is trading at $29. You feel the stock price will decline,...

The stock of Flop Industries is trading at $29. You feel the stock price will decline, so you short 1,300 shares at an initial margin of 50 percent. If the maintenance margin is 35 percent, at what share price will you receive a margin call? (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) Margin call price $