Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Old Economy Traders opened an account to short sell 1,700 shares of Internet Dreams at $54 per share. The initial margin requirement was 50%. (The

image text in transcribed
image text in transcribed
Old Economy Traders opened an account to short sell 1,700 shares of Internet Dreams at $54 per share. The initial margin requirement was 50%. (The margin account pays no interest.) A year later, the price of Internet Dreams has risen from $54 to $60, and the stock has paid a dividend of $2.50 per share. c. What is the rate of return on the investment? (Round your answer to 2 decimal places. Negative value should be indicated by a minus sign.) Rate of return $ 31.48%

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Commodity Market Trading And Investment

Authors: Tom James

1st Edition

1137432802, 978-1137432803

More Books

Students also viewed these Finance questions