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You are bearish on Telecom and decide to sell short 100 shares at the current market price of $42 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of th value of the short position? Initial margin

You are bearish on Telecom and decide to sell short 100 shares at the current market price of $42 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of th value of the short position? Initial margin

Essentials Of Investments
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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You are bearish on Telecom and decide to sell short 100 shares at the current market price of $42 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? Initial margin b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round your answer to 2 decimal places.) Stock price reaches
Transcribed Image Text:You are bearish on Telecom and decide to sell short 100 shares at the current market price of $42 per share. a. How much in cash or securities must you put into your brokerage account if the broker's initial margin requirement is 50% of the value of the short position? Initial margin b. How high can the price of the stock go before you get a margin call if the maintenance margin is 30% of the value of the short position? (Round your answer to 2 decimal places.) Stock price reaches
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