Old Economy Traders opened an account to short sell 2,100 shares of Internet Dreams at $62 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 $62 to $70, and the stock has paid a dividend of $1.50 per share.
a. What is the remaining margin in the account? (Round your answer to the nearest whole number.) Remaining margin 1
b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?
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.)
Rate of return %. Get Finance homework help today
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