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Problem 3 Suppose that to short a stock you are required to deposit an amount equal to the initial price Xo of the stock. At

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Problem 3 Suppose that to short a stock you are required to deposit an amount equal to the initial price Xo of the stock. At the end of 1 year the stock price is X1 and you liquidate your position. You receive your profit from shorting equal to Xo - X1 and you recover your original deposit. If R is the total return of the stock, what is the total return on your short

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