a.) You short 1,000 shares of Auburn inc. Stock. The current market price is $54 per share. The initial margin requirement is 50% and the stock does not pay dividends. ignore interest. If you maintenance margin is 30%, at what price will you get a margin call?

b.) You buy 1,000 shares of Bama stock on margin and your initial margin is 50% (i.e you borrowed half of the total investment and used your own funds for the other half). The current market price is $80 per share. Ignore Interest. If your maintenance margin is 32% at what price will you get a margin call?

Answer rating: 100% (QA)

a To calculate the price at which you will receive a margin call when shorting 1000 shares of Auburn Inc stock we need to consider the initial margin ... View the full answer