Assume that you short-sell 500 shares of a stock at a price, Ask an Expert

Finance

Assume that you short-sell 500 shares of a stock at a price of $45 a share at a 50% initial margin.

A. If, after one year, the price instead rose to $50 and paid a $2 dividend what would be your return? (4 points)

B. How could a stop-buy order reduce your loss exposure?

C. If the maintenance margin was 25%, at what price would you receive a margin call?

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Financial Management, Finance

Category:- Financial Management
Reference No.:- M92654158

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