Price of the stock go before you get a a margin call


Problem:

Maintenance Margin

You are bearish on XYZ stock and decide to short 100 shares at the current market price of $50 per share.

Required:

Question 1: How much in cash or securities must you have in your brokerage account if the broker's initial margin requirement is 50% of the value of the short position?

Question 2: How high can the price of the stock go before you get a a margin call if the maintenance margin is 30% the value of the short position?

Note: Please provide full description.

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Accounting Basics: Price of the stock go before you get a a margin call
Reference No:- TGS0884428

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