Old Economy Traders opened an account to short sell 1,200 shares of Internet Dreams at $44 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 $44 to $56, and the stock has paid a dividend of $3.00 per share.
a. What is the remaining margin in the account? (Omit $ sign in your response.)
Remaining margin $
b. If the maintenance margin requirement is 30%, will Old Economy receive a margin call?
multiple choice
yes
No
c. What is the rate of return on the investment? (Negative value should be indicated by a minus sign. Round your answer to 2 decimal places.)
Rate of return %
