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You are given the following prices for two stocks. Stock A: Bid = 75.50, Ask = 75.65 Stock B: Bid = 90.60, Ask = 90.80
You are given the following prices for two stocks. Stock A: Bid = 75.50, Ask = 75.65 Stock B: Bid = 90.60, Ask = 90.80 Julia sells short 10 shares of stock A, and Rob sells short 10 shares of stock B. Both Julia and Rob invest the proceeds from the short sale at an annual effective rate of 5% At the end of one year, Julia covers her short position for 75-0.2X per share, and Rob covers his short position for 75+0.5X per share. Julia and Rob earn the same amount of profit on the transaction, P. Calculate P
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