3 Questions
How much money will you receive from the initial short sale?
You will receive $7,500 from the initial short sale (200 shares * $75 per share * 50% initial margin requirement).
What will your profit or loss be when you close out the short position at $60 per share?
Your profit will be $1,500 when you close out the short position at $60 per share ($7,500 initial sale - $6,000 to cover position).
How much money will you need to cover your short position?
You will need $6,000 to cover your short position (200 shares * $60 per share).
Test your understanding of short selling and margin requirements with this quiz. Calculate the initial short sale proceeds and the amount needed to cover a short position based on given stock price changes and margin requirements.
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