sells 500 shares of Gold Mine Corp. short at $80 per share. The margin requirement is 50 percent. The stock falls to $62 over a three-month time period, and he closes out his position. How much is his initial margin? What is his percentage gain or loss on his initial margin? If he is in a 35 percent tax bracket for short-term capital gains and a 15 percent bracket for long-term capital gains, what is his tax obligation? If the stock went up to $94 instead of down to $62, what would be his dollar loss? Assuming this is his only transaction for the year, h
sells 500 shares of Gold Mine Corp. short at $80 per share. The margin requirement is 50 percent. The stock falls to $62 over a three-month time period, and he closes out his position. How much is his initial margin? What is his percentage gain or loss on his initial margin? If he is in a 35 percent tax bracket for short-term capital gains and a 15 percent bracket for long-term capital gains, what is his tax obligation? If the stock went up to $94 instead of down to $62, what would be his dollar loss? Assuming this is his only transaction for the year, h
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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Al Rodriguez sells 500 shares of Gold Mine Corp. short at $80 per share. The margin requirement is 50 percent. The stock falls to $62 over a three-month time period, and he closes out his position.
- How much is his initial margin?
- What is his percentage gain or loss on his initial margin?
- If he is in a 35 percent tax bracket for short-term
capital gains and a 15 percent bracket for long-term capital gains, what is his tax obligation? - If the stock went up to $94 instead of down to $62, what would be his dollar loss?
- Assuming this is his only transaction for the year, how large a tax deduction could he take against other income?
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