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Problem 1. You shorted 500 shares of stock A at $100/share yesterday. Assume an initial...

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Finance

Problem 1. You shorted 500 shares of stock A at $100/share yesterday. Assume an initial margin of 50% and a maintenance margin of 35%. Stock A reported earnings today that beat analysts forecasts by a wide margin. As a result, the stock is now trading at $120. What is the minimum number of shares you need to cover if you wish to maintain a short position in the stock? Assume you cannot buy or sell fractional shares.

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