You short sold 1,100 shares of stock at a price of $29 and an initial margin of
ID: 2637212 • Letter: Y
Question
You short sold 1,100 shares of stock at a price of $29 and an initial margin of 55 percent. If the maintenance margin is 40 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
You short sold 1,100 shares of stock at a price of $29 and an initial margin of 55 percent. If the maintenance margin is 40 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Explanation / Answer
Calculation of margin call
=$29(1-0.55)/1-0.40
=$21.75
Margin call will be received when price of stock rises above $21.75
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