In May of 2018 Teslas (TSLA) price per shares plummeted to $252.48 after a fatal accident involving its auto-driving Model X car. One month previously (in April), you had a dream this would happen and shorted 10 shares at $335.12 each. Assume you have an interest rate of r = 0.01 (1%) per annum, and that all interest is compounded continuously. (a) What is your payout and what is your profit in this scenario?

(b) What is your breakeven price? Note: you are selling borrowed shares and earning interest before you pay them back. TSLA can rise a little before you make no profit. (c) Create a payoff and profit diagram for this transaction. Be sure to label all axis, and to indicate the breakeven point.