Suppose that you sell short 1500 shares of Microsoft, which is currently selling for $22 per share. Your broker requires 30% initial margin in short sales, which you covered using the T-bills in your account.

-If the maintenance margin is 20%, how high can Microsoft's price rise before you get a margin call?

-How much money would you have to put into your account in order to satisfy the maintenance margin requirement if the price suddenly jumped to $31 a share?

Answer rating: 100% (QA)

ANSWER To calculate the answers we need to follow these steps Determine the initial margin requirement Calculate the price at which a margin call woul... View the full answer