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What is the gme price could tolerate before a margin call

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Problem 1: During the last week of January 2021, the shares of Gamestop (GME) skyrocketed from USD 17.25 to USD 347.51 as of the close on January 27th. You have an investment account with USD 10,000 in cash and no other securities and you decide to take a short position in GME. You borrow the shares and sell 18 shares at $343.71 per share. Given the brokerage policy of issuing margin calls at 30%, what is the GME price (to the nearest cent) you could tolerate before a margin call? Ignore trading expenses and security borrowing costs.

a) $392.60

b) $446.82

c) $691.74

d) $606.74

e) $726.74

Reference no: EM132894173

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