Mike Short Sold 400 Shares of DeSoto Lumber Stock at $22

question 32

Multiple Choice

Mike short sold 400 shares of DeSoto Lumber stock at $22 a share at an initial margin of 70%. The maintenance margin is 35%. What is the highest the stock price can go before he receives a margin call?

• A)$24.12
• B)$25.48
• C)$26.22
• D)$27.70
• E)$28.16

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Definitions:

Snowblowers

Machines designed for removing snow from surfaces, such as driveways and sidewalks, using a rotating auger to collect and eject the snow to the side.

Inventory Turnover

A metric that reveals the number of times a company's inventory is sold and restocked within a certain period.

Days in Inventory

A financial metric that indicates the average number of days a company takes to sell its entire inventory.

Ending Inventory

The amount of inventory available to be sold by the end of an accounting term.