Question

Question 1 (20 points) Suppose you wish to sell short 150 shares of Boeing Co (NYSE BA). The current selling price per share
0 0
Add a comment Improve this question Transcribed image text
Answer #1

Margin Call Price = 1+ InitialMargin 1 + Maintainance Margin *(Selling Price

= 1+0.40 1+0.35 * (30)

= 1.03703703703 * 30 =$31.11

NOTE: The answer to your question has been given below/above. If there is any query regarding the answer, please ask in the comment section. If you find the answer helpful, do upvote. Help us help you.

Add a comment
Know the answer?
Add Answer to:
Question 1 (20 points) Suppose you wish to sell short 150 shares of Boeing Co (NYSE...
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. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • please answer question one and question two and show all work Question 1 (20 points) Suppose...

    please answer question one and question two and show all work Question 1 (20 points) Suppose you wish to sell short 150 shares of Boeing Co (NYSE BA). The current selling price per share is $30. The initial margin requirement for the short sell is 40%. The broker requires a 35% maintenance margin, please calculate the stock price that will trigger a margin call. Question 2 (20 points) The stock of Boeing Co (NYSE BA) sells for $30 a share....

  • Question 6: 6. You sell short 250 shares of BNO that are currently selling at $72...

    Question 6: 6. You sell short 250 shares of BNO that are currently selling at $72 per share. You post the 50% margin required on the short sale. BNO stock does not pay dividends. Assume that you earn no interest on the funds in your margin account. If your broker requires a 40% maintenance margin, at what stock price will you get a margin call? or (Circle one: higher, lower). Answer: I will get a margin call if the stock...

  • Suppose you short sell 20 shares of ABC, now selling at $51 per share. The initial...

    Suppose you short sell 20 shares of ABC, now selling at $51 per share. The initial margin of your purchase is 55% and the maintenance margin is 25%. At what stock price will you receive a margin call?

  • You sell short 200 shares of Doggie Treats Inc. which are currently selling at $52 per...

    You sell short 200 shares of Doggie Treats Inc. which are currently selling at $52 per share. You post the 50% margin required on the short sale. If your broker requires a 28% maintenance margin, at what stock price will you get a margin call? (You earn no interest on the funds in your margin account and the firm does not pay any dividends) You short-sell 217 shares of Alibaba, at $108 per share. If you wish to limit your...

  • IN CLASS ASSIGNMENT Suppose You short sell 500 shares of ABC stock at $25/share Initial margin...

    IN CLASS ASSIGNMENT Suppose You short sell 500 shares of ABC stock at $25/share Initial margin requirement is 50% and maintenance margin requirement is 40% A year later, stock price increases to $30/share QI. Initially, how much did you supply and how much did you borrow? Create an initial Balance sheet for short sale margin account. Q2. After a year later, what is your new margin? Did you get a margin call? Create a new B/S for this question Q3....

  • . On January 1, you tell your broker to sell short 500 shares of Apple Inc....

    . On January 1, you tell your broker to sell short 500 shares of Apple Inc. stock at a price of $100 per share. You use $30,000 cash to serve as a margin. (a) (5 points) How high can the stock price go before you get a margin call if the maintenance margin is 50%? (b) Assume that on April 1, a dividend of $4 per share was paid. On May 1, you covered the short sale by buying the...

  • 1. You are bearish on Telecom stock and decide to sell short 100 shares at the...

    1. You are bearish on Telecom stock and decide to sell short 100 shares at the current market price of $50 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short...

  • You want to short sell 100 shares of PQR using a 60% margin. The maintenance margin...

    You want to short sell 100 shares of PQR using a 60% margin. The maintenance margin is 30%. The current price of PQR is $40. How much money did you have to invest today? What price will trigger a margin call? What is the overall rate of return on your investment if the stock is selling at a price of $48 in 1 year? What is the overall rate of return on your investment if the stock is selling at...

  • You are bearish on a technology stock and decide to sell short 100 shares at the...

    You are bearish on a technology stock and decide to sell short 100 shares at the current market price of $36.00 per share. a.) How much in cash or securities must you put into your brokerage account if the broker’s initial margin requirement is 50% of the value of the short position b.) How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short...

  • Assume that you just short sold 300 shares of Spencer stock at $120 per share. The...

    Assume that you just short sold 300 shares of Spencer stock at $120 per share. The initial margin requirement (IMR) is 50 percent and the maintenance margin requirement (MMR) is 30 percent. (7 pts) What price would trigger a margin call? c.

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT