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Suppose that you sell short 250 shares of Xtel, currently selling for $70 per share, and give your broker $10,000 to establish your margin account.

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Suppose that you sell short 250 shares of Xtel, currently selling for $70 per share, and give your broker $10,000 to establish your margin account. a. If you earn no interest on the funds in your margin account, what will be your rate of return after one year if Xtel stock is selling at: (i) $78; (ii) $70; (iii) $64? Assume that Xtel pays no dividends. (Leave no cells blank - be certain to enter "0" wherever required. Negative values should be indicated by a minus sign. Round your answers to 2 decimal places.) i. (15.00) 1% ii. Rate of return Rate of return Rate of return 0 % iii. 15.00 %

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