P15.2 Shirley McCain is a regular commodities speculator. She is currently considering a short position in August

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P15.2 Shirley McCain is a regular commodities speculator. She is currently considering a short position in August fine wool, which is now trading at 1245. Her analysis suggests that August fine wool should be trading at about 1220 in a couple of months. Assuming that her expectations hold up, what kind of return on invested capital will she make if she short sells three August fine wool contracts (with each contract covering 2500 kilograms) by depositing an initial margin of $960 per contract?

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Fundamentals Of Investing

ISBN: 9781442532885

3rd Edition

Authors: Lawrence J. Gitman, Michael D. Joehnk, Scott Smart, Roger Juchau, Donald Ross, Sue Wright

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