You are bearish on Apple Stock and decide to short sell the stock. You sell 3000 shares

Fantastic news! We've Found the answer you've been seeking!

Question:

You are bearish on Apple Stock and decide to short sell the stock. You sell 3000 shares at $20/share. You are required to post an initial margin of 50% and pay in maintenance margin if the margin level drops below 30%.

a. Within hours after you sell short, the stock climbs to $23/share. What is your current margin rate?

b. How high can the stock rise in price before you get a margin call?

c. The stock rises to $26/share. How much cash will you need to deposit in your account to bring the margin rate up to 30%?

Related Book For answer-question

Investments

ISBN: 978-0071338875

8th Canadian Edition

Authors: Zvi Bodie, Alex Kane, Alan Marcus, Stylianos Perrakis, Peter

See More Books

Posted Date: Apr 24, 2024 09:20 AM

See More Questions

Consider the roles and responsibilities associated with the careers and job positions of a criminal justice practitioner. Explore the following websites of several major professional organizations...
A research-based discussion of the organizational, financial, and economic structures that must be in place for a transformational strategic plan to be successfully enacted. How can leaders assure...
Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...
The following are selected items from the accounting records of Georgia Peach for the year ended December 31, 2015: Note payable to SmithField Bank . . . . . . . . . . . . . . . . . . . . . . . . . ....
What is the elasticity of substitution? What does it tell us?
The following information is available for Fuller Manufacturing Company for the month ending January 31: Cost of direct materials used in production $147,300 Direct labor 176,800 Work in process...
An orthotropic AS/3501 carbon/epoxy lamina (see Tables 2.2 and 4.1) is subjected to the plane stress condition $\sigma_{x}=1000 \mathrm{MPa}, \sigma_{y}=50 \mathrm{MPa}$, and \(\tau_{x y}=50...
Melissa Ostwerk, the new controller of TurboDrives, Inc., has just returned from a seminar on the choice of the activity level in the predetermined overhead rate. Even though the subject did not...
Luke Corporation produces a variety of products, each within its own division. Last year, the managers at Luke developed and began marketing a new chewing gum, Bubbs, to sell in vending machines. The...
a) Dialog Corp (DC) provides technical services to the upstream, midstream, and downstream sectors in the oil, gas, and petrochemical industry. The current market price of DC stock is $6.50 per share...
Ivanhoe Company issues 7000 shares of its $10 par value common stock having a fair value of $30 per share and 10000 shares of its $10 par value preferred stock having a fair value of $30 per share...
Describe three ways non-verbal communication is used in customer service. Give examples of each. Describe three non-verbal cues you may receive when healing with an upset customer.
What is the current state of Public Broadcasting in the Philippines. Explain your answer thoroughly
Using the accounts receivable method, Jurasic Pork, Inc., estimates that $4,000 of its receivables will not be collected as of year end. Prior to adjustment, the Allowance for Doubtful Accounts has a...
1. Given f(x)=- x +3x + 2x x + x-2 complete the following: a. Write the rational expression in lowest terms, leaving it in factored form. (6 points) b. Write the domain in interval notation. (6...
According to Merrill, what are some major legal challenges and issues co-habituating couples face? Why is this important issue? As co-habitation rises, do you believe the legal system will...
Problem 2. (0.6 points, 0.2 points for each question) (a) A company turns its inventory 2 times a month. Its months-of-supply = Its days-of-supply = Please show your analysis below: _months. days. (1...
The treatment of outflows on account of dividend and interest is highly debatable as to their activity classification. Give a serious thought to the issue and express your opinion about the best...
Reliance Industries Ltd. is the biggest private sector company in India. The following fact sheet about the company and its peer group, as extracted from Capitaline Plus database is reproduced in the...
Consider the same setting as Problem 18, but suppose instead 80% of the shareholders redeem their shares, and no warrants are exercised. Data from problem 18 a. What is the amount of cash per share...

You are bearish on Apple Stock and decide to short sell the stock. You sell 3000 shares

Question:

Expert Answer:

Lets calculate the answers to each question based on the given information a To determine the curren... View the full answer

Investments

Students also viewed these finance questions