Assume you entered a 1,500 share short position in Pollution Co. at $37/share, which is the only position currently in this trading account. The initial margin you were required to post was 50% and the maintenance margin is 35%. b. If the share price does rise just enough to trigger a margin call,(i) how much margin will remain in the account when you receive the margin and (ii) how much additional cash will you be required to contribute to the account in order to maintain the short position?
Assume you entered a 1,500 share short position in Pollution Co. at $37/share, which is the only position currently in this trading account. The initial margin you were required to post was 50% and the maintenance margin is 35%. b. If the share price does rise just enough to trigger a margin call,(i) how much margin will remain in the account when you receive the margin and (ii) how much additional cash will you be required to contribute to the account in order to maintain the short position?
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Assume you entered a 1,500 share short position in Pollution Co. at $37/share, which is the only position currently in this trading account. The initial margin you were required to post was 50% and the maintenance margin is 35%. b. If the share price does rise just enough to trigger a margin call,(i) how much margin will remain in the account when you receive the margin and (ii) how much additional cash will you be required to contribute to the account in order to maintain the short position?
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