question archive An investor expects that the stock price of the ABC firm is overpriced and decide to sell short 700 stocks at $60 each
An investor expects that the stock price of the ABC firm is overpriced and decide to sell short 700 stocks at $60 each
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An investor expects that the stock price of the ABC firm is overpriced and decide to sell short 700 stocks at $60 each. The investors deposited 50% margin as required.
a. What would be investor’s percentage margin if the stock price increases to $70 each.
b. If the maintenance margin is 25%, then to what extent the price would increase before the investor receive a margin call from the broker.
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