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Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams at...

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Finance

Old Economy Traders opened an account to short sell 1,000 shares of Internet Dreams at $42 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $42 to $53.

What was the initial margin you had to add to the account?

A. $42,000

B. $21,000

C. $53,000

D. $10,000

What was the amount you walk away with when you close the short sale position?

A. $42,000

B. $21,000

C. $53,000

D. $10,000

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