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Need help solving B-3 and C-3. Not sure if the formula I'm using is wrong but need guidance here. You believe the price of Freeze
Need help solving B-3 and C-3. Not sure if the formula I'm using is wrong but need guidance here.
You believe the price of Freeze Frame Co. stock is going to fall, so you short 900 shares at a price of $45. The initial margin is 50 percent. Ignore dividends. a. Construct the equity balance sheet for the original trade. (Input all amounts as positive values.) b-1. Construct equity balance sheets for a stock price of $40 per share. (Input all amounts as positive values.) b-3. What is your effective annual return if you cover your short position at this price in five months? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correct. c-1. Construct equity balance sheets for a stock price of $50 per share. (Input all amounts as positive values.) c-2. What is your margin? (Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete and correct. \begin{tabular}{|l|l} \hline Margin & 35.00V \\ \hline \end{tabular} c-3. What is your effective annual return if you cover your short position at this price in five months? (A negative value should be indicated by a minus sign. Do not round intermediate calculations. Enter your answer as a percent rounded to 2 decimal places.) Answer is complete but not entirely correctStep by Step Solution
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