Today, you short sell 200 shares of stock at $34 a share. The initial margin is 60% and the maintenance margin is 30%. Which of the following is correct concerning your account balance sheet for this transaction? Ignore margin interest, trading costs and taxes.
A) You have an asset of $4,080 from the proceeds
B) You have a liability from the short position of $2,720
C) Your account equity is $4,080
D) Your initial margin is $2,720
E) Your total assets are $6,800
Correct Answer:
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