Imagine you have $5000 you want to invest. Swift corporations stock is currently selling for $100. The stock price will either go up to $120 or go down to $90 with equal probability. Consider the following strategy. Show your work.

1. Short sell $5000 of stock. Put all $10000 in T-bills that earns 2 percent.

   What are all possible payoffs? What are the possible returns? What is the expected return? What is the variance of the returns?