Question: Please help and show how you figured it out! Thank you!! Problem 2 Assume you sold short 20 shares of common stock at $50. The
Please help and show how you figured it out! Thank you!!
Problem 2 Assume you sold short 20 shares of common stock at $50. The initial margin is 50%. a. [2pts) What would be the new margin if stock price increases to $55 per share? b. [2pts] What stock price would you receive a margin call if the maintenance margin is 30%? c. [2pts] What would be the maintenance margin if a margin call is made at a stock price of $60? d. [1pt] A year later, the stock price has declined to $40. What is the rate of return on the investment if the stock has paid dividend of $1 per share? (Stock borrowers must return the paid dividend to the stock lenders)
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