Assume you sold short 100 shares of common stock at \$40 per share. The initial margin is 50%. What would be the maintenance margin if a margin call is made at a stock price of \$50

20%

12%

25%

15%

27.5% 600M /3b

10.54%

7.97%

11.26%

8.26%

9.63%

4.44%

5.56%

2.22%

3.33%

5.91%

I and II only

II, III, and IV only

II and III only

I only

II only

Cannot be determined

0.40

0.47

2.14

0.80

1.5%; 1.9%

2.5%; 1.1%

1.8%; 1.6%

1.5%; 1.1%

3.2%; 2.0%

0.64

0.08

0.36

0.35

0.39

the portion of the investment opportunity set that lies above the global minimum variance portfolio

both the portion of the investment opportunity set that lies above the global minimum variance portfolio and the portion of the investment opportunity set that represents the highest standard deviations

the portion of the investment opportunity set which includes the portfolios with the lowest standard deviation

the set of portfolios that have zero standard deviation

the portion of the investment opportunity set that represents the highest standard deviations

the portfolio standard deviation will always be equal to the securities' covariance

both the portfolio standard deviation will be greater than the weighted average of the individual security standard deviations and it will always be equal to the securities' covariance

the portfolio standard deviation will be equal to the weighted average of the individual security standard deviations

the portfolio standard deviation will be greater than the weighted average of the individual security standard deviations

the portfolio standard deviation will be less than the weighted average of the individual security standard deviations

There is a linear relationship between the securities' coefficient of correlation and the portfolio variance

The higher the coefficient of correlation between securities, the greater the reduction in the portfolio variance and there is a linear relationship between the securities' coefficient of correlation and the portfolio variance

The degree to which the portfolio variance is reduced depends on the degree of correlation between securities

The higher the coefficient of correlation between securities, the greater the reduction in the portfolio variance

The higher the coefficient of correlation between securities, the greater the reduction in the portfolio variance and the degree to which the portfolio variance is reduced depends on the degree of correlation between securities