Gautam short sells 2,000 stocks at Rs. 100 per share. The initial margin requirement is 60 percent and maintenance margin is 30 percent a. What would…
BBS Fundamentals of Investment · 2081 · Solved Question with Answer
Gautam short sells 2,000 stocks at Rs. 100 per share. The initial margin requirement is 60 percent and maintenance margin is 30 percent
a. What would be Gautam's amount of margin equity and margin loan if stock price rises to Rs. 115 per share?
b. What is the margin call price of stock? Would Gautam receive margin call if the market stock price rises to Rs. 115 per share?
c. What is Gautam's rate of return from short sells of stock if stock price falls to Rs. 80 per share assuming no interest on margin?