Suppose that you just short sold 100 shares of Quiet Minds stock for $85.00 per share.
a. If the initial margin requirement is 65%, how much equity must you invest?
b. Construct the balance sheet that corresponds to the transaction.
c. Now suppose the price of the stock falls to $77 per share. What is your current margin percentage?
d. The maintenance margin is 40%. Whats the lowest pnco that will trigger a margin call?