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Suppose you have $10,000 in cash to invest. You decide tosell short $5000 worth of Kinston stock and invest the proceedsfrom your short sale, plus
Suppose you have $10,000 in cash to invest. You decide tosell short $5000 worth of Kinston stock and invest the proceedsfrom your short sale, plus your $10,000 into one-year U.S. treasurybills earning 5%. At the end of the year, you decide toliquidate your portfolio. Kinston Industries has thefollowing realized returns:
| P0 | P1 |
Kinston | $25.00 | $30.00 |
The return on your portfolio is closest to:
A) -0.5%
B) 13.5%
C) -2.5%
D) 14.5%
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