You are bearish on BCE stock and decide to sell short 100 shares at the current market

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You are bearish on BCE stock 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 percent 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 minimum margin is 30 percent of the value of the short position?

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Investments

ISBN: 978-0071338875

8th Canadian Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus, Stylianos Perrakis, Peter

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Question Posted: Jun 21, 2015 03:36 AM

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You are bearish on BCE stock and decide to sell short 100 shares at the current market

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a Initial margin is 50 of 5000 o...View the full answer

Investments

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