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Assume that an investor short-sells 1,000 shares of stock at a price of $65 a share, making a 50% margin deposit. A year later, she
Assume that an investor short-sells 1,000 shares of stock at a price of $65 a share, making a 50% margin deposit. A year later, she repurchases the borrowed shares at $75 a share. A minus sign should precede negative answers, if any.
- How much of her own money did the short-seller have to put up to make this transaction? $
- How much money did the investor make, or lose, on this transaction? Ignore margin interest. $
- What rate of return did she make on her invested capital (see part a)? Ignore margin interest. Round the answer to two decimal places.
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