Satisfy initial margin requirement at the first margin call

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Reference no: EM131544101

Suppose initial margin rate is 50% and maintenance margin rate is 30%. The current stock price is $25. You short sell 10,000 shares. What is the initial margin dollar amount?

In the question above, at what price $P will you get the first “margin call"?

In the question above, how much do you need to deposit more to satisfy the initial margin requirement at the first margin call?

(Ignore interests from the proceeds and loan fees.)

All three are parts of one question. SHOW WORK

Reference no: EM131544101

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