You are very optimistic about the personal computer industry, so you buy 200 shares of Microtech Inc.

Question:

You are very optimistic about the personal computer industry, so you buy 200 shares of Microtech Inc. at $45 per share. You are very pessimistic about the machine tool industry, so you sell short 300 shares of King Tools at $55. Each transaction requires a 40 percent margin balance.
a. What is the initial equity in your account?
b. Assume the price of each stock is as follows for the next three months (month-end).
Compute the equity balance in your account for each month:

Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...