Old economy traders opened an account to short-sell 1000, Financial Management

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Old economy traders opened an account to short-sell 1000

Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $35 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 $35 to $41.50, and the stock has paid a dividend of $4.40 per share.

a. What is the remaining margin in the account?

b. What is the margin on the short position? (Round your answer to 2 decimal places.)

c. What is the rate of return on the investment.

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Financial Management: Old economy traders opened an account to short-sell 1000

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Financial Management: Old economy traders opened an account to short-sell 1000

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