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You sell short 500 shares of Facebook that are currently selling at $200 per share. You post the 50% margin required on the short sale.

You sell short 500 shares of Facebook that are currently selling at $200 per share. You post the 50% margin required on the short sale. What will be your rate of return after 1 year if Facebook is selling at $205 and does not pay any dividend? (Ignore any interest on the funds in your margin account.)

5.0%

2.5%

-2.5%

-5.0%

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