Question
You sell short 300 shares of Microsoft that are currently selling at $30 per share. You post the 50% margin required on the short sale.
You sell short 300 shares of Microsoft that are currently selling at $30 per share. You post the 50% margin required on the short sale. If you earn no interest on the funds in your margin account, what will be your rate of return after 1 year if Microsoft is selling at $27? (Ignore any dividends.)
| A 10% | |
| B | 20% |
| C | 6.67% |
| D | 15% |
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Handbook Of The Economics Of Finance
Authors: George M. Constantinides, Milton Harris, Rene M. Stulz
1st Edition
044459406X, 978-0444594068
