You believe that Rose, Inc., stock is going to fall and you’ve decided to sell 1

Question

You believe that Rose, Inc., stock is going to fall and you’ve decided to sell 1,100 shares short. If the current share price is $49, construct the equity account balance sheet for this trade. Assume the initial margin is 70 percent. (Do not round intermediate calculations. Input all amounts as positive values. Omit the "$" sign in your response.)

You believe that Rose, Inc., stock is going to fall and you’ve decided to sell 1,100 shares short. If the current share price is $49, construct the equity account balance sheet for this trade. Assume the initial margin is 70 percent. (Do not round intermediate calculations. Input all amounts as positive values. Omit the "$" sign in your response.)

Explanation / Answer

Ans:

Assets Amount($) Liabilities & Account Equity Amount ($) Proceeds from sale (1,100*49) 53900 Short Position (1,100*49) 53900 Initial Margin Deposit (53,900*70%) 37730 Account Equity 37730 Total 91630 Total 91630

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