Question
Suppose you have 30,000 in cash to invest. You decide to short sell 10,000 worth of Coca-Cola and invest the proceeds from your short sale
Suppose you have 30,000 in cash to invest. You decide to short sell 10,000 worth of Coca-Cola and invest the proceeds from your short sale plus your 30,000 in Intel. The initial price of Coca-Cola is 40 and increases to 42.40 producing a return of 6%. The initial price of Intel is 25 and increases to 31.50 producing a return of 26%. How many shares of Coca-Cola have you short sold and how many shares of Intel do you currently have?
a.
Short sold 300 of Coca cola and invested in 12000 shares of Intel
b.
Short sold 2,000 shares of Coca cola and invested in 80 shares of Intel
c.
Short sold 40 shares of Coca cola and invested in 400 shares of Intel
d.
Short sold 250 of Coca cola and invested in 1600 shares of Intel
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