Last Week, You Sold Short 400 Shares of Stock for $33

question 14

Short Answer

Last week, you sold short 400 shares of stock for $33 a share. The initial margin requirement is 65 percent and the maintenance margin is 30 percent. Today, that stock is selling for $36 a share. Construct a balance sheet for this short sale reflecting today's values.

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Definitions:

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity, providing a more useful tool for performance evaluation.

Master Budget

A comprehensive financial planning document that includes all of an organization's financial plans and budgets.

Goal Conflict

A situation where two or more goals are in opposition, making it difficult to achieve one without compromising the other.

Budget Slack

The intentional underestimation of revenues or overestimation of expenses within a budget to create a cushion for unexpected situations.