Suppose you are short selling stocks on margin. The margin requirement is 50%. Right now, you put

Fantastic news! We've Found the answer you've been seeking!

Question:

Suppose you are short selling stocks on margin. The margin requirement is 50%. Right now, you put $1,000 of your own money and the stock you want to short today has a price of $40 per share.

How many shares of stock can you short sell on margin?

What is your own equity percentage when the stock price turns out to be $50?

Related Book For answer-question

Foundations of Financial Management

ISBN: 978-1259024979

10th Canadian edition

Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta

See More Books

Posted Date: May 11, 2024 07:16 AM

See More Questions

1 What are the main components of personal financial planning? Solve What is the purpose of a financial plan? Solve Identify some common actions taken to achieve financial goals. How does a job...
2. Suppose you are short selling stocks on margin. The margin requirement is 50%. Right now, you put $1,000 of your own money and the stock you want to short today has a price of $40 per share.
Suppose you are buying stocks on margin. The margin requirement is 40% while the maintenance margin is 20%. Right now, you put $800 of your own money and the stock you want to buy today has a price...
Claud Chapperon is a self-employed distributor of wholesale clothing who began trading on 1 July 2012. His summarised accounts for the year to 30 June 2020 are shown below. The figures in brackets...
In the Illinois Quality Parts case study, we first ran the baseline model with a rate of $2/mile for all lanes. Figure 8.14 shows the output of this scenario, showing total cost and total miles...
A refrigerator moves heat from cold to warm. Why doesn't this violate the second law of thermodynamics?
The income statement for Mel Gibson Company shows cost of goods sold $$325,000$ and operating expenses (exclusive of depreciation) $$250,000$. The comparative balance sheets for the year show...
What is the difference between the applied variable overhead and the total variable overhead in the flexible budget? What is the difference between the applied factory overhead and the total flexible...
Solve Using Excel Present values ABC Corp. wishes to invest a fixed sum at 5.0% and withdraw $10,000 at the end of each month for the next three years. How much ABC will need to invest? In other...
In what ways do distributed operating systems employ sophisticated fault tolerance mechanisms, leveraging consensus protocols and distributed algorithms to ensure system reliability in a networked...
Differentiate. 6 y=x In x - 1 x 2 dy dx = 0
You have obtained data in an WGS84 (CSRS), UTM coordinate system (zone17) and wish to include it in a project in a WGS84 (CSRS), MTM coordinate system. Describe conceptually the operations that you...
A company predicted that it would manufacture 10,000 units of finished goods during March. The direct labor standards indicated that each unit of finished goods requires 2.4 direct labor hours at a...
1. Conde Inc. has projected sales to be: February, $20,000; March, $18,000; April, $16,000; May, $20,000; and June, $22,000. Conde has 30% cash sales and 70% sales on account. Accounts are collected...
1. Derive Freudensteins equation for a four bar linkage. 2. A four-link mechanism has the dimensions as: a = 1.5 cm, b= 4.5 cm, c=4.5 cm and d = 6.0 cm. Draw the limit positions. a=1.50 b=4.5 d=6...
Data table Fashion Music Co. Comparative Income Statements Years Ended December 31, 2021 and 2020 2021 2020 $ 1,080,000 $ 919,000 Total revenue Expenses: Cost of goods sold 479,000 $ 400,450 Selling...
Draw the appropriate control flow graph of the given pseudocode.Make sure to only use one number for blocks of code which are all sequential and when the first line is executed, all of those lines...
How can a buyer be protected against any hidden liabilities and debts that the target may have?
What is the purpose of representations and warranties? What are the limits of such clauses?
What is the logical result of a successful hostile buy-up of shares on the market?

Suppose you are short selling stocks on margin. The margin requirement is 50%. Right now, you put

Question:

Expert Answer:

ANSWER To calculate the number of shares you can short sell on margin first find the total margin av... View the full answer

Foundations of Financial Management

Students also viewed these finance questions