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David sells short 2958 shares of a stock at $145 per share. The initial margin requirement is 64%. The investor earns no interest on funds
David sells short 2958 shares of a stock at $145 per share. The initial margin requirement is 64%. The investor earns no interest on funds in the margin account, pays no fees for borrowing shares to short and no dividends are paid on the stock. What is the investor's rate of return after one year if the short sale is covered at $71 per share? Assume the margin when account is setup equals the initial margin requirement.
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