A broker is dealing with two clients: one that wants to buy on the margin and one

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A broker is dealing with two clients: one that wants to buy on the margin and one that wants to sell short. The stock is GE and it is currently trading at $72. GE pays $1.20 in dividends per share each year. The initial margin is 55%. The maintenance margin requirement is 35%. On each buy and each sell trade, the broker charges a $45 commission. The loan rate is 9%. Sami Short decides to short GE (1000 shares). What should Sami Short do to limit her loss to 15%?

		place a stop-buy at $83.19
		place a stop-sell at $83.19
		place a stop-buy at $84.71
		place a stop-sell at $84.71

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Applied Equity Analysis and Portfolio Management Tools to Analyze and Manage Your Stock Portfolio

ISBN: 978-1118630914

1st edition

Authors: Robert A.Weigand

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Posted Date: Sep 22, 2020 11:45 AM

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A broker is dealing with two clients: one that wants to buy on the margin and one

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Applied Equity Analysis and Portfolio Management Tools to Analyze and Manage Your Stock Portfolio

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