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Problem 2-23 Short Sales (LO4, CFA5) You believe the price of Rose, Inc., stock is going to fall and youve decided to sell 550 shares short. If th e current share price is $56 construct the equity account balarice sheet for this trade. Assume the initial margin is 100 percent (Input all amounts as positive values.) Assets Proceeds rom sale Initial margin depost Total Liabilities and account equity Short posiion Account equity Total Intal margn depostShostioncount
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Answer #1

Assets

Liabilities and account equity

proceeds from sale

56*550

30800

short position

56*550

30800

Initial margin

100% of 30800

30800

account equity

30800

30800

total

61600

61600

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