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At what price will margin call be issued

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Question (a) You sell short 500 shares of XYZ company at $40 each, with initial and maintenance margin of 50% and 30% respectively. Show your balance sheet after this transaction.

Question (b) Assume no interest is charged on borrowed money. What will be your return if share price rises to $45 next day?

Question (c) At what price will margin call be issued?

Reference no: EM132892466

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