User Account

All Pages

Short sale proceeds and the initial margin requirement

Assignment Help Finance Basics
Reference no: EM133117271

On January 3, 2005, you short sold 5,000 shares of Ebay, a pioneer in internet person-to-person trading, at the price of $114.11 per share. The initial margin requirement is 65% and the maintenance margin is 30%. Short sale proceeds yield 2% and the initial margin yields 3% (both rates are annual rates).

(a) Determine your short sale proceeds and the initial margin requirement.

(b) To what price must Ebay climb for you to receive a margin call?

(c) A month later, on February 3, 2005, Ebay fell to $77.22. What was the actual margin in your account? ((1) Suppose that you closed your account on February 3, 2005. What was the return on your investment?

Reference no: EM133117271

Questions Cloud

What is the amount of monthly payment : The firm borrowed $100,000 at 12% APR (monthly compounding) for five years. What is the amount of each monthly payment?
Prepare t-accounts to show the flow of costs : Recognized depreciation on manufacturing property, plant, and equipment of $10,500. Prepare T-accounts to show the flow of costs
Determine the average annual yield : Using one or more online sources, determine the annualized total return (i.e., including dividends reinvested), volatility (using monthly retruns), and Sharpe r
What is the present value of the liability : Ronen Consulting has just realized an accounting error that has resulted in an unfunded liability of $385,000 due in 22 years. Toni Flanders, the company's CEO.
Short sale proceeds and the initial margin requirement : On January 3, 2005, you short sold 5,000 shares of Ebay, a pioneer in internet person-to-person trading, at the price of $114.11 per share. The initial margin r
Trends and identified target market : Can someone please assist me with writing a brief history of Microsoft, its ticker symbol for the company, its competitive advantages, products offered, most re
Calculate the contribution margin per unit : Question - Phan Incorporated has annual fixed costs totaling $6,000,000 and variable costs of $350 per unit. Calculate the contribution margin per unit
Direct proportion to the volume of sales : 1. A fridge was sold during a clearance sale for $657.00. If the fridge was sold at a discount of 24%, the list price was $864.47.
Systematic risk before international diversification : The BMW company is debating the impacts of international diversification of its operations on its capital structure and cost of capital. The firm is planning on

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

Submit Assignment

Academics

Major Subjects

Majors

Get In Touch

whatsapp: +1-415-670-9521

Phone: +1-415-670-9521

Email: [email protected]

TERMS & POLICIES

HELP & SUPPORT

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd