Question: Please step by step guide A stock from $45 at t = 0 to $55 at t = 1. If you are selling this stock
Please step by step guide
A stock from $45 at t = 0 to $55 at t = 1. If you are selling this stock short, and assume broker holds proceeds of sale plus requires 50% margin, what is your return on equity over this time period?
A. 0.2222
B. -0.4444
C. 0.4444
D. -0.2222
A stock moves from $45 at t = 0 to $55 at t = 1. If you buy it on margin (50%), and assume zero interest to borrow money from your broker, what is your return on equity over this time period?
A. 0.2222
B. -0.4444
C. 0.4444
D. -0.2222
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