You open a margin account at Chas Pigeon, a discount broker. You subsequently short sell 10 shares of exciting.com at $286/per share. Your broker lends you the shares of stock and charges you an annual interest cost of 5% of the proceeds of the short sale. One year later, Exciting.com has declined to $200 per share, at which point you buy back the stock and return it to your broker.

• A.Themarginrequirementis50%.Calculateyourdollarlossorgainontheposition,takingintoaccounttheinterestpaidtoyourbroker.
• • B.Calculatethepercentreturnonyourinvestment.