Jennifer has a short position in IBM. She is shorting 44 shares. The total amount of cash in the brokerage account is $7,769.64. The initial margin is 58.14% and the maintenance margin is 34.52%. Assume that the price of IBM follows a normal distribution with mean 108.37 and standard deviation 13.10. If the price of IBM is in the lowest 2.28% of the distribution, what is Amanda's equity ratio?

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
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Jennifer has a short position in IBM. She is shorting 44 shares. The total amount of cash in the brokerage account is
$7,769.64. The initial margin is 58.14% and the maintenance margin is 34.52%. Assume that the price of IBM follows a
normal distribution with mean 108.37 and standard deviation 13.10.
If the price of IBM is in the lowest 2.28% of the distribution, what is Amanda's equity ratio?
Transcribed Image Text:Jennifer has a short position in IBM. She is shorting 44 shares. The total amount of cash in the brokerage account is $7,769.64. The initial margin is 58.14% and the maintenance margin is 34.52%. Assume that the price of IBM follows a normal distribution with mean 108.37 and standard deviation 13.10. If the price of IBM is in the lowest 2.28% of the distribution, what is Amanda's equity ratio?
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