Short Sales (show work)
You sold short 1000 shares of J.P Morgan Chase stock (ticker: JPM) at $60 per share. The initial margin is 50%.
a)At what stock price would you receive a margin call if the maintenance margin is 30%? (do not consider dividends in question a)
b)Assume that the JPM stock paid a $0.40 dividend per share each quarter, what is the rate of return if you buy to cover the JPM shares at $39 per share at the end of the quarter?