Assume that you open a 100 share short position in common stock at the bid-ask price of 31.50-32.50 at t = 0. When you close out the position at t=1.25, the bid-ask is 28.50-29.25. Interest rate = 0%. You are required to pay a .4% commission rate when buying or selling.

a) calculate the P&L on the investment when it is closed out at 1.25.

b) calculate the P&L if there is also a dividend payment at t = 1 of 35 cents per share.