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I need help with question c). The solution says that without commissions I lose $301.04 and with $300.5358. Why do I lose interests when a
I need help with question c). The solution says that without commissions I lose $301.04 and with $300.5358. Why do I lose interests when a short the stocks? Shouldn't I earn interests on the cash I get by short-selling?
1.7. Suppose you desire to short-sell 400 shares of JKI stock, which has a bid price of $25.12 and an ask price of $25.31. You cover the short position 180 days later when the bid price is $22.87 and the ask a. Taking into account only the bid and ask prices (ignoring commissions and interest), what b. Suppose that there is a 0.3% commission to engage in the short-sale (this is the commission price is $23.06. profit did you earn? to sell the stock) and a 0.3% commission to close the short-sale (this is the commission to buy the stock back). How do these commissions change the profit in the previous answer? C. se the 6-month interest rate is 3% and that you are paid nothing on the short-sale pro- s. How much interest do you lose during the 6 months in which have the short positionStep by Step Solution
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