Question: Please answer the question attached: l. (Shorting with margin) Suppose that to short a stock you are required to deposit an amount equal to the

Please answer the question attached: l. (Shorting with margin) Suppose that

Please answer the question attached:

l. (Shorting with margin) Suppose that to short a stock you are required to deposit an amount equal to the initial price X0 of the stock. At the end of 1 year the stock price is X1 and you liquidate your position. You receive your prot from shorting equal to X0 - X I and you recover your original deposit. If R is the total return of the stock, what is the total return on your short

Step by Step Solution

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock blur-text-image

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

1. (Shorting with margin) Suppose that to short a stock you are required to deposit an amount equal to the initial price Xo of the stock. At the end of 1 year the stock price is X and you liquidate...

Mean-Variance Portfolio Theory. Suppose that to short a stock you are required to deposit an amount equal to the initial price Xo of the stock. At the end of 1 year the stock price is X1 and you...

2 Mean-Variance Portfolio Theory. a Suppose that to short a stock you are required to deposit an amount equal to the initial price Xo of the stock. At the end of 1 year the stock price is X1 and you...

Suppose that to short a stock you are required to deposit an amount equal to the initial price X0 of the stock. At the end of 1 year the stock price is X1 and you liquidate your position. You receive...

Please find attached financial statements for Apple Inc, Samsung Inc. and word document that contains template and question. (for Samsung Inc, you can use the information from page 4 to 14). 1....

Suppose that to short a stock you are required to deposit an amount equal to initial price of the stock. At the end of year 1, the stock price is X_1 and you liquidate your position. You receive your...

Suppose that to short a stock you are required to deposit an amount equal to the initial price $X_{0}$ of the stock. At the end of 1 year the stock price is $X_{1}$ and you liquidate your position....

Questions 11-13 are based on the following information. ABC Co. is a growth company, whose stock is currently traded in Nasdaq. The book value-based accounting balance sheet at the year-end is as...

Hi Ruchi, I need help with the attached assignment. It's due in about a week. Thanks 1) The paper should be written in APA style Research Paper format. This is the link that explains the research...

ANSWER QUESTIONS 4 (A),(B),(C) USING THE CASE STUDY ATTACHED TO THE APPENDIX. THANK YOU. Question 4 [Total 20 marks] Case Study (refer Appendix) (a) Should Peoples Federal Savings have hedged its...

Imagine that you are preparing taxes for a local tax service provider. A married couple named Judy and Walter Townson has come to you to seeking assistance with their federal income taxes. During...

What is a passive activity? What types of activities are automatically considered passive?

3. As the denial or perversion of justice by the sentences of courts, as well as in any other manner, is with reason classed among the just causes of war, it will follow that the federal judiciary...

7. Water flows with a velocity of 6 m/s through 6 m of cast-iron pipe (roughness = 0.0003 m). The pipe has an inside diameter of 43 mm. The kinematic viscosity of the water is 1.00x10 m2/s. The...

Passengers who travel on Qantas flights are allocated Qantas Frequent Flyer points. The entitled passengers not only derive the benefits associated with flight services they receive but they are also...

Assume you are managing partner of a law firm. Business has been slow, and you are charged with making a decision regarding which associate should be laid off. There are two contenders as follows:...

Estimating bad debts can be done by the percentage of sales method and the aging of accounts receivable method. Each method has its drawbacks and advantages. If the company you were reviewing used...

The expected level of operations in the early years of asset life is expected to be low when compared to that of later years. This may be true because of slack demand or production policies. Based on...

Tori and some other childeen experimented with balls to see which ones rolled. First using a piece of cardboard to use as a ramp, they angled it on a block to the floor to test the balls. Then Tori...

If the organizational culture of the restaurant does not change, what are some likely outcomes and consequences? ju5

Opportunity describes the conditions within an organization that limit or permit ethical or unethical behavior. Yes No

The first step in ethical decision making is to understand the individual factors that influence the process. Yes No