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You have sold short 100 shares of Topley Industries at $50 per share. Just as you anticipated, the price falls and you cover your short
You have sold short 100 shares of Topley Industries at $50 per share. Just as you anticipated, the price falls and you cover your short position when the price hits $42 per share three months later. The company paid $1 per share in dividends over this period. What is your annualized rate of return on this investment? Assume an initial margin requirement of 60%.
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