Consider a binomial tree with one future period (T=0,1) in which the price can go up to 27 or decrease to 16. The price of the asset at T=0 is 20, and there is an equal chance that it goes up or down at T=1. The investor starts with an initial wealth of $1,000. The risk-free asset yields a return of zero percent.

What is the wealth of the investor at T=1 if the asset price drops, and the investor short-sells and takes a negative position on the risky asset equal to $1,800?

Select one:

a. 1360

b. 840

c. none of the options provided

d. -1360

e. -840