You short sold 800 shares of stock at a price of $45 and an initial margin of 55

Question

You short sold 800 shares of stock at a price of $45 and an initial margin of 55 percent. If the maintenance margin is 30 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Do not round intermediate calculations. Round Margin call price to 2 decimal places. Omit the "$" sign in your response.)

You short sold 800 shares of stock at a price of $45 and an initial margin of 55 percent. If the maintenance margin is 30 percent, at what share price will you receive a margin call? What is your account equity at this stock price? (Do not round intermediate calculations. Round Margin call price to 2 decimal places. Omit the "$" sign in your response.)

Explanation / Answer

Margin call price= $45*(1-0.55)/(1-0.3)

Margin Call price= $28.93

Margin call would be received if share price falls below $28.93

Account Equity= $28.93*800

Account Equity= $23144

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