Old economy receive margin call

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Reference no: EM131955266

Old Economy Traders opened an account to short sell 1,600 shares of Internet Dreams at $52 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $52 to $60, and the stock has paid a dividend of $2.00 per share.

a. What is the remaining margin in the account? (Omit the "$" sign in your response.)

Remaining margin $

b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?

Yes

c. What is the rate of return on the investment? (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign. Omit the "%" sign in your response.)

Rate of return %

Reference no: EM131955266

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