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You sell short 200 shares of ABC which are currently selling at $40 per share. You post the 60% margin required on the short sale.
You sell short 200 shares of ABC which are currently selling at $40 per share. You post the 60% margin required on the short sale. If ABC pays $1 dividend and you earn no interest on the funds in your margin account, what will be your rate of return after one year if you cover you short position at $45? (Ignore any transaction costs)
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