To cover the initial margin requirement of 60 percent, you deposited funds after short- selling 100 shares

Question:

To cover the initial margin requirement of 60 percent, you deposited funds after short- selling 100 shares of common stock at $ 45 per share.

a. What is your rate of return if you cover at $ 50, assuming no dividends and no addition or removal of funds from the account?

b. At what price would you receive a margin call if the minimum margin requirement is 30 percent?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...