Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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%.

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Gapenskis Understanding Healthcare Financial Management

Authors: George H. Pink, Paula H. Song

8th Edition

1640551093, 978-1640551091

More Books

Students also viewed these Finance questions