Question

In: Finance

You are bearish on Telecom and decide to sell short 100 shares at the current market...

You are bearish on Telecom 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 position?

Solutions

Expert Solution

jeff jeffy answered 1 year ago
Next > < Previous

Related Solutions

You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $39 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 position? (Round...
You are bearish on Telecom and decide to sell short 100 shares at the current market...
You are bearish on Telecom and decide to sell short 100 shares at the current market price of $40 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? Initial margin            $ 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...
You are bearish on Telecom and decide to sell short 180 shares at the current market...
You are bearish on Telecom and decide to sell short 180 shares at the current market price of $70 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? (Round your answer to the nearest whole number.) b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30%...
You are bearish on Loser CO. and decide to sell short 100 shares at the current...
You are bearish on Loser CO. and decide to sell short 100 shares at the current market price of $49 per share. The initial margin is 50%. How high can the price of the stock go before you get a margin call if the maintenance margin is 25% of the value of the short position? Round your answer to the nearest cent (2 decimal places).
You are bearish on Commodore stock and decide to sell short 100 shares at the current...
You are bearish on Commodore stock and decide to sell short 100 shares at the current market price of $60 per share. (the stock does not expect dividends so ignore any expected dividend) a) How much cash must you put into your brokerage account if the initial margin requirement is 50% of the value of the short position? b) If you are wrong and the stock price increases, at what price would you receive a margin call from your broker...
4. You are bearish on Google stock and decide to sell short 20 shares at the...
4. You are bearish on Google stock and decide to sell short 20 shares at the current market price of $1500 per share. (a) How much cash 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 stock price rise before you get a margin call if the maintenance margin is 20%?
You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at...
You decide to sell short 100 shares of Charlotte Horse Farms when it is selling at its yearly high of R56. Your broker tells you that your margin requirement is 45 percent and that the commission on the purchase is R155. While you are short the stock, Charlotte pays a R2.50 per share dividend. At the end of one year, you buy 100 shares of Charlotte at R45 to close out your position and are charged a commission of R145...
You decide to sell 100 shares of Mason Enterprises short when it is selling at its...
You decide to sell 100 shares of Mason Enterprises short when it is selling at its yearly high of ¢42.25. Your broker tells you that your margin requirement is 60 percent and that the commission on the sale is ¢20 and a 6% interest rate on margin debt. While you are short, Mason Enterprises pays a ¢0.85 per share dividend. a. If at the end of one year you buy your Mason Enterprises shares to cover your short sale at...
Question 1 a. You sell short 100 shares of stock at a price of $100 per...
Question 1 a. You sell short 100 shares of stock at a price of $100 per share with an initial margin of 65 percent and maintenance margin of 25 percent. Show this in a “T” balance sheet format, and calculate your margin. Price = 100 Credit for short sale Cash Deposit = Liability: Market Value of short sale Equity = Total Assets = Liabilities + Equity= b. Margin = c. If the price falls to $90 per share, show this...
You decide to sell short 200 shares of Charlotte Horse Farms when it is selling at...
You decide to sell short 200 shares of Charlotte Horse Farms when it is selling at its yearly high of $51. Your broker tells you that your margin requirement is 65 percent and that the commission on the purchase is $330. While you are short the stock, Charlotte pays a $2.35 per share dividend. At the end of one year, you buy 200 shares of Charlotte at $36 to close out your position and are charged a commission of $320...
ADVERTISEMENT
Subjects
ADVERTISEMENT
Latest Questions
ADVERTISEMENT