After an analysis of Lion/Bear, Inc., Karl OGrady has concluded that the firm will face financial difficulty within a year. The stock is currently selling for $15 and OGrady wants to sell it short. His broker is willing to execute the transaction but only if OGrady puts up cash as collateral equal to the amount of the short sale. If OGrady does sell the stock short, what is the percentage return he loses if the price of the stock rises to $18? Use a minus sign to enter the amount as a negative value. Round your answer to the nearest whole number.

%

What would be the percentage return if the firm went bankrupt and folded? Round your answer to the nearest whole number.

%

2. Barbara buys 100 shares of DEM at $25.00 a share and 200 shares of GOP at $37.00 a share. She buys on margin and the broker charges interest of 7 percent on the loan.

1. If the margin requirement is 53 percent, what is the maximum amount she can borrow? Round your answer to the nearest cent.

   $

2. If she buys the stocks using the borrowed money and holds the securities for a year, how much interest must she pay? Round your answer to the nearest cent.

   $

3. If after a year she sells DEM for $13.00 a share and GOP for $31.00 a share, how much did she lose on her investment? Use a minus sign to enter the amount as a negative value. Round your answer to the nearest cent.

   $

4. What is the percentage loss on the funds she invested if the interest payment is included in the calculation? Use a minus sign to enter the amount as a negative value. Round your answer to two decimal places.

   %