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You decide to sell short 100 shares of Gogu stock when it is selling at its yearly high of RM56. Your broker tells you that
You decide to sell short 100 shares of Gogu stock when it is selling at its yearly high of RM56. Your broker tells you that your margin requirement is 45% and that the commission on the purchase is RM155.While you are short the stock, Gogu pays a RM2.50 per share dividend. At the end of one year, you buy 100 shares of Gogu at RM45 to close out your position and are charged a commission of RM145 and 8% interest on the money borrowed. What is your rate of return on the investment?
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