2. Returns and Risks in Investments (a) You believe IBM is overvalued and short 100 shares of IBM at the current price of $100 per share. You give you broker $10,000 to establish your margin account. Assuming IBM does not pay dividend and you earn no interest on the funds in your margin account. What is the return of your investment if after one year IBM stock is selling at $120? (b) Explain what a stop gain order is and how it can limit the potential loss of your short position in the stock. 2. Returns and Risks in Investments (a) You believe IBM is overvalued and short 100 shares of IBM at the current price of $100 per share. You give you broker $10,000 to establish your margin account. Assuming IBM does not pay dividend and you earn no interest on the funds in your margin account. What is the return of your investment if after one year IBM stock is selling at $120? (b) Explain what a stop gain order is and how it can limit the potential loss of your short position in the stock