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An investor short sells 100 shares of a particular stock which is trading at $8.50/share. She borrows the stock from a broker who agrees to
An investor short sells 100 shares of a particular stock which is trading at $8.50/share. She borrows the stock from a broker who agrees to pay her 70% of the broker loan rate. Assume the broker loan rate is 10%. The investor unwinds her short position after 30 days by repurchasing 100 shares of the same stock when it is trading at $6.20/share. During this period, the stock pays a dividend of $0.5/share. Calculate the investors net profit or loss.
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