You are bearish on Telecom stock and decided to sell short 100 shares at the current market price of $50 per share.

c. If you earn no interest on the funds in your margin account, what will be your rate of return after 1 year if Telecom stock is selling at $40? Assume that Telecom stock pays no dividend.

d. Redo part (c), but now assume that Telecom also has paid a year-end dividend of $1 per share. The price in part (c) should be interpreted as ex-dividend, that is, prices after the dividend has been paid.