Now assume that that you short 4500 shares of AT&T (T) at $25 per share. Your...

Now assume that that you short 4500 shares of AT&T (T) at $25 per share. Your broker has a 40% initial margin. How does this look in the balance sheet?

ii. Your broker has a maintenance margin of 30%. If the price of the stock falls to $20 per share, what is your new margin? Are you benefited or affected by the price decrease?

iii. How do you represent it in the balance sheet?

Expert Solution

jeff jeffy answered 1 year ago

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