ear ago, you have short-sold 4000 shares of Stock Z, which was trading at $150 per share. After a year, Stock Z pays a yearly dividend of $4 per share, and the interest rate is 10%. What price would you get a margin call if the maintenance margin is 30%

ear ago, you have short-sold 4000 shares of Stock Z, which was trading at $150 per share. After a year, Stock Z pays a yearly dividend of $4 per share, and the interest rate is 10%. What price would you get a margin call if the maintenance margin is 30%

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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Question

A year ago, you have short-sold 4000 shares of Stock Z, which was trading at $150 per share. After a year, Stock Z pays a yearly dividend of $4 per share, and the interest rate is 10%.

What price would you get a margin call if the maintenance margin is 30%?

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