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Author Question: Kensington Company stock was selling at $132 a share when Charlotte sold 300 shares of the stock ... (Read 78 times)


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Question 1

Justin just made a margin purchase of 100 shares of DEF Corp. for $22.50 per share. The initial margin is 70%. The maintenance margin is 30%. How low can the price of each share of DEF be before Justin will have to add equity to his account?
◦ $4.73
◦ $5.25
◦ $6.75
◦ $9.64

Question 2

Kensington Company stock was selling at $132 a share when Charlotte sold 300 shares of the stock short. Today Charlotte bought 300 shares of the same stock at a price of $140 per share to cover her position. Ignoring trading costs, what is the dollar return on Charlotte's investment?
◦ $2,400
◦ -$800
◦ $800
◦ $-2,400

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Marked as best answer by yulisa3298 on Mar 29, 2022

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