You sold short 200 shares of XYZ common stock at $40 per share. What is the...

Question

Question

You sold short 200 shares of XYZ common stock at $40 per share. What is the minimum amount you must place with your broker?

A) 4000

B) 2400

C) 8000

D) 5600

business finance

Answer 1

Answer #1

The minimum amount you must place with your broker for short selling

= share price * quantity * initial margin

If initial margin is 50% we use 0.5 as initial margin.However, the initial margin is not provided here.

Thus, we will take it as 1

Thus,

The minimum amount you must place with your broker for short selling

= 40*200*1

= $8000

Option C

Answer 2

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