In March of 2022, I shorted 1,000 shares of Tyco International at $53 a share. Two weeks
Question:
In March of 2022, I shorted 1,000 shares of Tyco International at $53 a share. Two weeks later, I closed out the short when Tyco hit $33 a share.
1. How much did I have to have in my account before I shorted the stock?
2. What was my return after I closed out the short?
3. If I didn't close out the short, how high could the price go without me getting a margin call?
4. If the price increased 20% from the highest it could go without a margin call, what was my actual margin?
5. What was the amount of my margin call?
6. Assume I met the margin call. What was my new equity?
7. Suppose I couldn't meet the margin call. What is the maximum market value I could have?
8. What was the necessary reduction?
9. How many shares did my broker buy?
10.What is the new value of my total assets?
11.What is the new value of my loan?
Income Tax Fundamentals 2013
ISBN: 9781285586618
31st Edition
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill