Question: Part B: Problem solving (20 Marks, 5 marks each) Problem 1: You believe the price of Freere Frame Co. Mock is going to fall, so
Part B: Problem solving (20 Marks, 5 marks each) Problem 1: You believe the price of Freere Frame Co. Mock is going to fall, so you short 750 shares at a price of $67. The initial margin is 70 percent. Tgpore dividends. a-Fill up the equity balance sheets for a stock price of $5% per share. b- What is your margin? bu Proceeds from sale Short position Initial margin deposit Account equity Assets Total Total Answer: Problem 2: You just sold short 1,200 shares of Wetscope, Inc., a fledgling software firm, at $82 per share. You cover your short when the price hits $72.50 per share one year later. If the company paid $.37 per share in dividends over this period, what is your rate of return on the investment? Assume an initial margin of 50 percent. (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.)
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