Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams from the previous problem. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $40 to $50, and the stock has paid a dividend of $2 per share. a. What is the remaining margin in the account
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Ответ:
a.38%
b. No because the margin is above the requirement at 38%
c.-150%
Explanation:
a.
1000 shares*$40 per share = 40000
margin requirement is 50% so equity = 20000
1 year later price increase to 50
$1000 shares*$50 per share = 50000
dividend = $2*1000 = 2000
margin = 20000/52000 = 38%
b.
No because the margin is above the requirement at 38%
c.
Price of 1000 stock year 1 at 50$/share = 50000
40000 – 50000 = -10000
Rate of return = (-10000 -20000)/20000 = -150%
Ответ:
free points
Explanation: