Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $80 per share

Feb 3rd, 2012
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Old Economy Traders opened an account to short-sell 1,000 shares of Internet Dreams at $80 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 $80 to $93.00, and the stock has paid a dividend of $12.00 per share. a. What is the remaining margin in the account? b-1. What is the margin on the short position? b-2. If the maintenance margin requirement is 30%, will Old Economy receive a margin call? c. What is the rate of return on the investment?

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