Old economy traders opened an account to short sell 1,500 shares of internet dreams at $50 per share. The initial margin requirement was 50% (pays no interest). A year later, the price of internet dreams has increased to $65 and the stock has paid a dividend of $1.50 per share.
a. What is the remaining margin in the account?
b. 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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