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Suppose Formuras stock is currently trading at $50 per share, but Lorenzo believes that the stock is overpriced. In response to this, he calls his
Suppose Formuras stock is currently trading at $50 per share, but Lorenzo believes that the stock is overpriced. In response to this, he calls his broker to take a short position on 300 shares of Formuras stock. Over the next three months, the price of Formuras stock decreased, and Lorenzo placed an order to purchase 300 shares to offset his short position. If the price decreased to $45, then Lorenzo stands to earn $______ from his short position.
-$3,000 | ||
$3,000 | ||
-$1,500 | ||
$1,500 |
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