Question: Assume that an investor short sells 500 shares of stock

Assume that an investor short sells 500 shares of stock at a price of $75 a share, making a 50 percent margin deposit. A year later, she repurchases the borrowed shares at $55 a share.
a. How much of her own money did the short-seller have to put up to make this transaction?
b. How much money did the investor make, or lose, on this transaction?
c. What rate of return did she make on her invested capital (see part a)?


View Solution:


Sale on SolutionInn
Sales2
Views268
Comments
  • CreatedFebruary 13, 2015
  • Files Included
Post your question
5000