Homework Answers
The answer is:
| Margin call price | 47.57 |
| Account equity | 11,417.14 |
Calculations:
Proceeds from short sale = 600 shares*$37 = $22,200
Initial deposit = $22,200*80% = $17,760
Account value = 22200+17760 = $39,960
Thus margin call price = 39,960/[600+(0.40*600)] = 47.57
Account equity = 39,960 – (600*47.57) = 11,417.14
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