Suppose that your evil twin opened an account short sell, Ask an Expert

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Suppose that your evil twin opened an account short sell 1000 sharesofIntemet Dreams from the previous problem. The initialmargin requirement was 50%(the margin account paysno interest). Ayear later, the prioeof Intermet Dreams has risen from $40 $50, and thestock has paid a dividend of $2/share.

a. What is remaining margin ($) in your evil twins account ?

b. If the maintenance margin requirement is30%, will your evil twin receive a margin call?

c. What is the rateof retun on your evil twin's investment?

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Financial Management, Finance

Category:- Financial Management
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